Acorn Energy, Inc 10-K for FY2025
Acorn Energy, Inc. (ACFN)
About this 10-K
Acorn Energy, Inc filed this 10-K on March 5, 2026, covering the fiscal year ended December 31, 2025 (FY2025).
Headline figures
Fiscal year ended December 31, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $11.48M
- up 4.5% from $10.99M a year earlier
- Net income
- $2.51M
- down 60.1% from net income of $6.29M a year earlier
- Diluted EPS
- $0.99
- down 60.6% from $2.51 a year earlier
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DOCUMENTS INCORPORATED BY REFERENCE:
TABLE OF CONTENTS
Certain statements contained in this report are forward-looking in nature. These statements can be identified by the use of forward-looking terminology such as “believes”, “expects”, “may”, “will”, “should” or “anticipates”, or the negatives thereof, or comparable terminology, or by discussions of strategy. You are cautioned that our business and operations are subject to a variety of risks and uncertainties and, consequently, our actual results may materially differ from those projected by any forward-looking statements. Certain of such risks and uncertainties are discussed below under the heading “Item 1A. Risk Factors.”
OmniMetrix®, OmniView®, Omni®pending, OmniPro®pending, ScopeViewTM, SmartServiceTM, TrueGuardTM and TrueShieldTM are trademarks of OmniMetrix, LLC.
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PART I
ITEM 1. BUSINESS
OVERVIEW
Acorn Energy, Inc. and its subsidiaries, OMX Holdings, Inc. and OmniMetrix, LLC (collectively, “Acorn” or “the Company”) is a Delaware corporation which is a holding company focused on technology-driven solutions for energy infrastructure asset management. We provide the following products and Internet of Things (“IoT”) applications and services through our OmniMetrix, LLC (“OmniMetrix”) subsidiary:
| ● | Power Generation (“PG”). OmniMetrix’s PG services provide wireless remote monitoring and control systems and IoT applications for commercial/industrial and residential power generation equipment. In 2025, we launched the Omni family of products—the OmniPro commercial monitor and the Omni residential monitor—built on a new proprietary common communications core called the OCOM, a platform designed to enhance connectivity, reliability and performance in remote monitoring systems. These products are replacing our legacy TrueGuard product lines, offering enhanced flexibility, expandability, and improved connectivity with easier installation. OmniMetrix also offers the Smart Annunciator product for commercial customers who require a visual representation of generator status via a touchscreen display. | |
| ● | Cathodic Protection (“CP”). OmniMetrix’s CP services provide remote monitoring and control products for cathodic protection systems on gas pipelines serving the gas utilities market and pipeline operators. The CP product lineup includes solutions to remotely monitor and control rectifiers, test stations and bonds. In 2025, we launched the RADex, an OCOM-based expansion of our RAD™ (Remote AC Mitigation Disconnect) that adds cathodic protection measurements while retaining the ability to remotely disconnect/connect AC mitigation tools on solid-state decouplers, reducing expense and increasing employee safety. |
During 2025 and 2024, each of our PG and CP activities represented a reportable segment.
We continually evaluate opportunities related to our activities, and our goal is to maximize shareholder value and position our holdings for a strategic event, which may include co-investment by one or more third parties and/or a synergistic acquisition of another company.
FINANCIAL RESULTS BY COMPANY
The following tables show, for the periods indicated, the financial results (dollar amounts in thousands) attributable to each of our consolidated companies.
| Year ended December 31, 2025 | ||||||||||||
| OmniMetrix | Acorn | Total | ||||||||||
| Revenues | $ | 11,478 | $ | — | $ | 11,478 | ||||||
| Cost of goods sold (COGS) | 2,663 | — | 2,663 | |||||||||
| Gross profit | 8,815 | — | 8,815 | |||||||||
| Gross profit margin | 77 | % | 77 | % | ||||||||
| Research and development (R&D) expense | 1,094 | — | 1,094 | |||||||||
| Selling, general and administrative (SG&A) expense | 4,352 | 1,380 | 5,732 | |||||||||
| Operating income (loss) | $ | 3,369 | $ | (1,380 | ) | $ | 1,989 | |||||
| Year ended December 31, 2024 | ||||||||||||
| OmniMetrix | Acorn | Total | ||||||||||
| Revenues | $ | 10,986 | $ | — | $ | 10,986 | ||||||
| COGS | 2,987 | — | 2,987 | |||||||||
| Gross profit | 7,999 | — | 7,999 | |||||||||
| Gross profit margin | 73 | % | 73 | % | ||||||||
| R&D expense | 1,012 | — | 1,012 | |||||||||
| SG&A expense | 4,030 | 1,020 | 5,050 | |||||||||
| Operating income (loss) | $ | 2,957 | $ | (1,020 | ) | $ | 1,937 | |||||
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OMNIMETRIX – POWER GENERATION MONITORING AND CONTROL AND CATHODIC PROTECTION MONITORING AND CONTROL
OmniMetrix is a Georgia limited liability company based in Buford, Georgia that develops and markets wireless remote monitoring and control systems and services for critical assets (including stand-by power generators, pumps, pumpjacks, light towers, turbines, compressors, fire pumps and other industrial equipment) and multiple markets in the IoT ecosystem, as well as cathodic protection solutions for the pipeline industry (gas utilities and pipeline companies). Acorn owns 99% of OmniMetrix, with the remaining 1% owned by OmniMetrix’s former CEO.
Following the emergence of IoT applications whereby companies aggregate multiple sensors and monitors into a simplified dashboard for customers, OmniMetrix believes it plays a key role in this economic ecosystem within the sectors in which it operates. OmniMetrix continues to see a rapidly growing need for backup power infrastructure to secure critical military, government, and private sector assets against emergency events including natural disasters, other impacts of climate change, demand response, cybersecurity threats and terrorist attacks. Residential and industrial standby generators, turbines, compressors, pumps, pumpjacks, light towers and other industrial equipment are part of the critical infrastructure increasingly being monitored in IoT applications. OmniMetrix solutions monitor critical equipment used by cell towers, manufacturing plants, medical facilities, data centers, retail stores, public transportation systems, energy distribution and federal, state and municipal government facilities, in addition to residential back-up generators. Given that OmniMetrix monitors all major brands of critical equipment and continues to invest in research and development in response to customer and potential customer feedback, OmniMetrix is well-positioned to grow its customer base and expand its product offerings in this market.
Products & Services
In the PG segment, OmniMetrix sells devices and services built on our OCOM communications platform. The Omni family—including the Omni residential monitor and OmniPro commercial monitor—launched in 2025 and is phasing out the legacy TrueGuard product line. These devices connect directly to generator control panels across all brands and models, capturing operational data to identify whether emergency power equipment is capable of operating as expected. OmniMetrix also sells the Smart Annunciator for commercial customers who require a large touch-screen display of generator status.
In the CP segment, OmniMetrix offers the Hero 2 Rectifier Monitor, Patriot Plus Test Station Monitor, and RAD/RADex product family. These products monitor cathodic protection systems that reduce rust and corrosion on natural gas pipelines. The Hero 2 monitors and controls rectifiers, the most common point of failure in pipeline systems. The Patriot Plus provides data points along pipeline segments including AC current density. The patented RAD and RADex mount onto existing solid-state decouplers to remotely disconnect/connect AC mitigation tools; the RADex, launched in 2025 on the OCOM platform, adds cathodic protection measurement capabilities.
On January 1, 2026, Acorn Energy entered into a strategic technology partnership with AIO Systems, Ltd. to expand Acorn’s infrastructure asset management technology offerings for cell towers, data centers, and utility assets in North America. Under the agreement, Acorn has exclusive rights to market, distribute, integrate, and sell AIO’s cloud-based monitoring and analytics solutions under the OmniMetrix brand in the United States, Canada, and Mexico, significantly expanding Acorn’s product portfolio and addressable market. The partnership leverages AIO’s globally-deployed technology and provides for shared Software-as-a-Solution (SaaS) and monitoring revenues, with Acorn expecting a phased rollout and limited near-term revenue contribution as integration and market expansion efforts progress.
Customers and Markets
At its core, the OmniMetrix family of PG monitors can remotely monitor and control a variety of industrial engine applications, including engines, standby generators, air and gas compressors, fire pumps, batteries, turbines, pumps and other equipment. Early in the company’s history, a strategic decision was made to focus primarily on the standby power generation market. Subsequently,, the company has expanded its focus to add several additional applications where it sees demand. Standby generator monitoring is part of the IoT ecosystem, whereby multiple sensing and monitoring devices are aggregated into one simple dashboard for customers.
As OmniMetrix can monitor and control all major brands of standby generators and continues to innovate, it is well-positioned to compete in this market.
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In the early stages of OmniMetrix’s PG product and market development, relatively unsophisticated generator controls and early generation cellular and satellite communication processes limited the applications to alarm delivery. Customers were notified that some event had taken place after the fact. There was no diagnostic data opportunity, but service organizations could practice a reactive service approach.
With the advent of second-generation cellular systems and newer, computerized engine controls, OmniMetrix migrated to a design point of collecting large amounts of performance data from remote machinery, which allows service organizations to perform diagnostics on equipment before dispatching service. These enhanced control panels allowed the service organization to put the right person in the right truck with appropriate parts to affect a one-trip or even a zero-trip solution. At this phase, service organizations could be efficient, proactive, and provide a higher level of customer satisfaction. They could also manage more customers by using remote monitoring. Service providers have provided OmniMetrix feedback regarding how customer service teams are able to work “smarter” and more efficiently by going directly to problem sites with the appropriate people, parts and solutions, thus increasing the value of their businesses.
OmniMetrix is now focused on expanding its product offerings while also executing the development and launch of new advanced versions of its existing power generation monitoring products. This includes maturing the high-performance data collection design point into the first provider offering of automated prognostic solutions. For example, as most generator failures are the result of consumables, and as those consumables can be monitored, the consumption trends can be extrapolated into predictions of the most common failure modes.
OmniMetrix’s PG monitors have been installed on commercial, industrial and residential generators from original equipment manufacturers (“OEMs”) such as Caterpillar, Kohler, Generac, Cummins, Briggs & Stratton, MTU Solutions and other generator manufacturers. OmniMetrix provides dual value propositions to the generator dealer service organizations as well as to the machine owner. The dealers benefit from the receipt of performance data and status conditions from the generators they service for their customers, which allows the dealer service organization to be proactive in their delivery of service to their customers, as well as in analyzing the remote machines before dispatching a service truck. Since the majority of service and warranty costs are incurred by the service providers, preemptive analysis of customer site conditions prior to dispatch can significantly reduce their labor cost. From the machine owner’s perspective, the OmniMetrix product provides a powerful tool to be used in their efforts to avoid failures that come from consumables such as batteries and fuel. With proper monitoring, 95% of machine failures can be avoided completely. This migration from failure reporting to failure prevention is fundamentally OmniMetrix’s focus and is the result of a strong data collection and analysis design point. We believe that this transition to prognostics sets OmniMetrix apart from its competitors, many of whom are still in the failure reporting phase of application development. OmniMetrix has also shifted its primary focus to commercial and industrial segments from residential due, in part, to the ability to customize our products to the customers’ specifications. We have also increased our marketing efforts to end users in an effort to increase demand for our services. These efforts have proven to be successful, and OmniMetrix continues to execute that strategy.
Competition
OmniMetrix is deeply focused on providing excellent customer experience and product and service designs for a complete end-to-end program for its customers. Having been the first provider of wireless remote monitoring systems for standby generators, the Company has had the opportunity to mature its offering to a level not offered by others who compete in our two segments. This long experience working with key brand and project partners over the years has resulted in product offerings that are highly competitive.
There are two types of competitors in the PG marketplace:
| (1) | Independent monitoring organizations produce monitoring systems, but not the equipment being monitored. Aside from OmniMetrix, such companies include Ayantra, FleetZOOM, Gen-Tracker, and PowerTelematics in the high-performance power generation monitoring segment. Other competitors operate in the reactive “failure notification” mode described in the early stages of the OmniMetrix business model. These competitors position themselves in a lower performance, lower-price quadrant of the market typically due to the lesser amount of data their products can collect from the generator’s control panel compared to OmniMetrix. | |
| (2) | OEMs such as generator manufacturers or generator controls manufacturers that offer customer connectivity to their machinery. They offer a current generation connectivity replacing telephone dial-up modems that had been used in the past. Their offerings are limited to their own brands, so they do not fit into broad customer applications like the OmniMetrix products that service all brands. They are also generally designed for the machine owners’ use, in a reactive application, similar to lower-performance, lower-priced market competitors. |
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We believe OmniMetrix has a well-established and well-defended position in the high-performance PG monitoring segment, due to its long history and numerous industry partner projects. The Company executes an aggressive sales strategy and comprehensive marketing efforts, developing more sophisticated, diagnostic products and custom solutions for commercial and industrial clientele and pursuing the market segment that requires less technology and lower price points (the extremely large and growing residential generator market).
Within the CP marketplace, there are no OEM competitors, but there are several companies that provide monitoring capabilities similar to OmniMetrix such as Mobiltex Solutions, Abriox, Elecsys, and American Innovations. We believe that OmniMetrix systems provide greater functionality than these competitors, though those competitors are much larger and have greater resources, potentially enabling better channel penetration in the future than OmniMetrix has accomplished to date.
Intellectual Property
OmniMetrix has always focused on being the technology leader in its markets, and as a result has created many “industry firsts” and “trade secrets”. Initially, the Company only pursued patents on the most valuable processes and systems and otherwise made public disclosure of many processes to prevent others from making later patent claims on those items. Nonetheless, OmniMetrix has four valid patents issued. OmniMetrix continually evaluates whether and how to best protect its intellectual property, but there can be no assurance that its efforts will be successful in all cases.
R&D Expense, Net
R&D expense recorded for the years ended December 31, 2025 and 2024 for our OmniMetrix subsidiary is as follows (amounts in thousands of U.S. dollars):
| Years ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| OmniMetrix | $ | 1,094 | $ | 1,012 | ||||
Employees
At December 31, 2025, we had a total of 27 employees (all of whom were employed in the United States by OmniMetrix), of whom 26 were full-time and one was part-time. Our CEO, who also serves as acting CEO of OmniMetrix, and our CFO, who also serves as COO of OmniMetrix, are hired as consultants to Acorn. OmniMetrix also has consultants that supplement our employed staff and provide monthly recurring services in engineering and information technology.
Thirteen of OmniMetrix’s 27 employees are engaged in production, engineering and technical support, eight in marketing and sales and six in finance and IT. We consider our relationship with our employees to be positive. We have no collective bargaining agreements with any of our employees.
Additional Financial Information
For additional financial information regarding our operating segments, foreign and domestic operations and sales, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Notes 12 and 13 to our Consolidated Financial Statements included in this Annual Report.
Available Information
We file annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission (the “SEC”). These filings are available to the public over the internet at the SEC’s website at http://www.sec.gov. You may also read and copy any document we file at the SEC’s public reference room located at 100 F Street, NE, Washington, DC 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room.
Our website can be found at http://www.acornenergy.com. We make available free of charge on or through our website, access to our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports as soon as reasonably practicable after such material is electronically filed, or furnished, to the SEC. Our website also includes our Code of Business Conduct and Ethics, and our Board of Directors’ Committee Charter for the Audit Committee.
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ITEM 1A. RISK FACTORS
We may from time to time make written or oral statements that contain forward-looking information. However, our actual results may differ materially from our expectations, statements or projections. The following risks and uncertainties, together with other factors not presently determinable, could cause actual results to differ from our expectations, statements or projections.
General Factors
We depend on key management for the success of our business.
Our success is largely dependent on the skills, experience and efforts of our senior management team, including Jan Loeb, CEO of Acorn and Acting CEO of OmniMetrix, who beneficially owns approximately 21% of the Company’s stock, and Tracy Clifford, CFO of Acorn and COO of OmniMetrix. The loss of the services of either of these key managers could materially harm our business, financial condition, future results and cash flow. We do not maintain “key person” life insurance policies on any members of senior management. We may also not be able to locate or employ on acceptable terms qualified replacements for our senior management if their services were no longer available.
Loss of the services of a few key employees could harm our operations.
We depend on key technical employees and sales personnel. The loss of certain personnel could diminish our ability to develop and maintain relationships with customers and potential customers. The loss of certain technical personnel could harm our ability to meet development and implementation schedules. The loss of key sales personnel could have a negative effect on sales to certain current customers. Our future success also depends on our continuing ability to identify, hire, train and retain other highly qualified technical and managerial personnel. If we fail to attract or retain highly qualified technical and managerial personnel in the future, our business could be disrupted.
Compliance with changing regulations of corporate governance, public disclosure and financial accounting standards may result in additional expenses and affect our reported results of operations.
Keeping informed of, and in compliance with, changing laws, regulations and standards relating to corporate governance, public disclosure and accounting standards, including the Sarbanes-Oxley Act, Dodd-Frank Act, as well as new and proposed SEC regulations and accounting standards, has required an increased amount of management attention and external resources. Compliance with such requirements may result in increased general and administrative expenses and an increased allocation of management time and attention to compliance activities.
We may not be able to successfully integrate companies which we may invest in or acquire in the future, which could materially and adversely affect our business, financial condition, future results and cash flow.
Part of our business plan includes the possibility of acquiring new companies either as new platform companies or complimentary companies. Any failure to effectively integrate any future acquisitions into our controls, systems and procedures could materially adversely affect our business, results of operations, financial condition and cash flow.
Any significant acquisition could require substantial use of our capital and may require significant debt or equity financing. We anticipate the need to closely manage our cash for the foreseeable future and cannot provide any assurance as to the availability or terms of any such financing or its effect on our liquidity and capital resources.
Integrating acquisitions is often costly, and we may not be able to successfully integrate acquired companies with existing operations without substantial costs, delays or other adverse operational or financial consequences. Integrating acquired companies involves a number of risks that could materially and adversely affect our business, including:
| ● | failure of the acquired companies to achieve the results we expect; | |
| ● | inability to retain key personnel of the acquired companies; | |
| ● | dilution of existing stockholders; | |
| ● | potential disruption of our ongoing business activities and distraction of our management; | |
| ● | difficulties in retaining business relationships with suppliers and customers of the acquired companies; | |
| ● | difficulties in coordinating and integrating overall business strategies, sales and marketing, and research and development efforts; and | |
| ● | difficulties in establishing and maintaining uniform standards, controls, procedures and policies, including accounting controls and procedures. |
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We have reported material weaknesses in internal controls over financial reporting as of December 31, 2025 and we cannot assure you that additional material weaknesses will not be identified in the future or that we can effectively remediate our reported weaknesses. If our internal control over financial reporting or disclosure controls and procedures are not effective, there may be errors in our consolidated financial statements that could require a restatement of our consolidated financial statements, or our filings may not be timely, and investors may lose confidence in our reported financial information.
Section 404 of the Sarbanes-Oxley Act of 2002 requires us to evaluate the effectiveness of our internal control over financial reporting as of the end of each year, and to include a management report assessing the effectiveness of our internal control over financial reporting in each Annual Report on Form 10-K.
Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Controls can be circumvented by the individual acts of some people, by the collusion of two or more people, or by management override of the controls. Over time, controls may become inadequate because changes in conditions or deterioration in the degree of compliance with policies or procedures may occur. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
Any failure to maintain or implement required new or improved controls, or any difficulties we encounter in their implementation, could result in significant deficiencies or material weaknesses, cause us to fail to timely meet our periodic reporting obligations, or result in material misstatements in our financial statements. Any such failure could also adversely affect the results of periodic management evaluations regarding disclosure controls and the effectiveness of our internal control over financial reporting required under Section 404 of the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder. The existence of a material weakness could result in errors in our consolidated financial statements that could result in a restatement of our consolidated financial statements, cause us to fail to timely meet our reporting obligations and cause investors to lose confidence in our reported financial information.
If we are unable to protect our intellectual property, or our intellectual property protection efforts are unsuccessful, others may duplicate our technology.
We rely on a combination of patents, trademarks, copyrights, trade secret laws and restrictions on disclosure to protect our intellectual property rights. Our ability to compete effectively will depend, in part, on our ability to protect our proprietary technology, systems’ designs and manufacturing processes. The ability of others to use our intellectual property could allow them to duplicate the benefits of our products and reduce our competitive advantage. We could incur substantial costs in prosecuting patent and other intellectual property infringement suits and defending the validity of our patents and other intellectual property. While we have attempted to safeguard and maintain our property rights, we do not know whether we have been or will be completely successful in doing so. These actions could place our patents, trademarks and other intellectual property rights at risk and could result in the loss of patent, trademark or other intellectual property rights protection for the products, systems and services on which our business strategy partly depends. Furthermore, it is not practical from a cost/benefit perspective to file for patent or trademark protection in every jurisdiction where we now or in the future may conduct business. In those territories where we do not have the benefit of patent or trademark protections, our competitors may be able to prevent us from selling our products or otherwise limit our ability to advertise under our established product names.
We rely, to a significant degree, on contractual provisions to protect our trade secrets and proprietary knowledge. These trade secrets either cannot be protected by patent protection, or we have determined that seeking a patent is not in our interest. These agreements may be breached, and we may not have adequate remedies for any breach. Our trade secrets may also be known without breach of such agreements or may be independently developed by competitors.
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Our financial instruments could subject us to concentrations of credit risk.
Our financial instruments, which potentially subject us to concentrations of credit risk, consist principally of cash and trade accounts receivable. Our cash was deposited with a U.S. bank and amounted to $4,454,000 at December 31, 2025. We had one customer, the party to the Material Contract, as defined below under Other Matters in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, which represented approximately 42% of the accounts receivable at December 31, 2025. As of March 3, 2026, 58% of this balance had been collected, with the remainder not yet due. Typically, credit risk with respect to the balance of trade receivables is generally diversified due to the number of entities comprising our customer base. However, at December 31, 2025, the balance of accounts receivable under the Material Contract represented more than 40% of the total outstanding balance of accounts receivable. Although we do not believe there is a significant risk of non-performance by this customer, any failures or defaults on their part could negatively impact the value of our financial instruments and could have a material adverse effect on our business, operations or financial condition.
International trade policies, including tariffs, sanctions and trade barriers may adversely affect our business, financial condition, results of operations and prospects.
We operate in a global economy, and our business depends on a global supply chain for the manufacturing of our products. There is inherent risk, based on the complex relationships among the U.S. and the countries in which we conduct our business, that political, diplomatic, and national security factors can lead to global trade restrictions and changes in trade policies and export regulations that may adversely affect our business and operations. The current international trade and regulatory environment is subject to significant ongoing uncertainty.
We source certain components and specialized equipment from international suppliers, with reliance on foreign manufacturers, including from China, Taiwan and Mexico. While we have not experienced a material impact to date from tariffs, any changes in tariff policies, particularly those affecting the locations of our suppliers and/or electronics and related materials, could materially increase our costs and reduce our profitability. Recent and potential future changes in international trade policies, including U.S.-China trade relations and electronics-specific tariffs, could present material risks to our operations and financial performance.
We are dependent on information technology and our systems and infrastructure face certain risks, including cybersecurity breaches and data leakage.
We rely extensively on information technology systems, networks and services, including internet sites, data hosting and processing facilities and tools, physical security systems and other hardware, software and technical applications and platforms, some of which are managed, hosted, provided and/or used for third-parties or their vendors, to assist in conducting our business. A significant breakdown, invasion, corruption, destruction or interruption of critical information technology systems or infrastructure, by our workforce, others with authorized access to our systems or unauthorized persons could negatively impact our operations. The ever-increasing use and evolution of technology, including cloud-based computing and AI, creates opportunities for the unintentional dissemination or intentional destruction or modification of confidential information stored in our, or our third-party providers’ systems, portable media or storage devices. We could also experience a business interruption, theft of confidential information or reputational damage from industrial espionage attacks, malware or other cyber-attacks, which may compromise our system infrastructure or lead to data leakage, either internally or at our third-party providers. We have invested in appropriate industry protections and monitoring practices of our data and IT and have established a Cybersecurity Steering Committee to reduce these risks and continue to monitor our systems on an ongoing basis for any current or potential threats. While we have purchased cybersecurity insurance, there are no assurances that the coverage would be adequate in relation to any losses incurred. Moreover, as cyber-attacks increase in frequency and magnitude, including by actors using AI, we may be unable to obtain cybersecurity insurance in amounts and on terms we view as appropriate for our operations. There can be no assurance that our continuing efforts will prevent breakdowns or breaches of our and/or our third-party providers’ databases or systems that could adversely affect our business.
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Risks Related to OmniMetrix
An increase in customer terminations would negatively affect our business by reducing OmniMetrix’s revenue or requiring us to spend more money to grow our customer base.
Although our historical renewal rate is greater than 90%, non-renewals or other monitoring service terminations could increase in the future due to customer dissatisfaction with our products and services, increased competition from other providers or alternative technologies.
If we have an increase in our non-renewal rate, we will have to acquire new customers on an ongoing basis just to maintain our existing level of customers and revenues. As a result, marketing expenditures are an ongoing requirement of our business. We incur costs to acquire new customers, and those costs are a factor in determining our net profitability. Therefore, if we are unsuccessful in retaining customers or are required to spend significant amounts to acquire new customers, our revenue could decrease and/or our operating results could be affected.
OmniMetrix is a relatively small company with limited resources compared to some of its current and potential competitors, which may hinder its ability to compete effectively.
Some of OmniMetrix’s current and potential competitors have significantly greater resources and broader name recognition than it does. As a result, these competitors may have greater credibility with OmniMetrix’s existing and potential customers. They also may be able to adopt more aggressive pricing policies and devote greater resources to the development, promotion and sale of their products, which would allow them to respond more quickly to new or emerging technologies or changes in customer requirements. In particular, at the present time we are facing significant competition from certain generator manufacturers who offer their own monitoring solutions. The leveraging of any of such advantages by our current and/or potential competitors could hinder OmniMetrix’s ability to compete effectively.
OmniMetrix may not be able to access sufficient capital to support growth.
While we believe we have sufficient cash to finance our operations for at least twelve months from the issuance of the audited consolidated financial statements contained in this Annual Report, we may need to seek additional sources of funding for long-term corporate costs or if OmniMetrix were not to grow at the rate anticipated and needed additional funds for their operations. Additional financing for OmniMetrix may be in the form of a bank line, a new loan or investment by others, an equity raise by Acorn which could then facilitate a loan by Acorn to OmniMetrix, or any combination thereof. The availability and amount of any additional loans from us to OmniMetrix may be limited by the working capital needs of our corporate activities. Whether Acorn will have the resources necessary to provide funding, or whether alternative funds, such as third-party loans or investments, will be available at the time and on terms acceptable to Acorn and OmniMetrix cannot be determined at this time.
OmniMetrix sells equipment and services which monitor third-party products; thus, its revenues are dependent on the continued sales of such third-party products.
OmniMetrix’s end-user customer base is comprised exclusively of parties who have chosen to purchase either generators or construct gas pipelines. OmniMetrix has no ability to control the rate at which new generators or cathodic protection systems are acquired. If purchases of such products decline, the associated need for OmniMetrix’s products and services would be expected to decline as well.
If OmniMetrix is unable to keep pace with changing markets or customer-mandated product and service improvements, OmniMetrix’s results of operations and financial condition may suffer.
Many of OmniMetrix’s existing products may require ongoing engineering and upgrades in conjunction with market developments as well as specific customer needs. There can be no assurance that OmniMetrix will continue to be successful in its engineering efforts regarding the development of its products, and future technological difficulties could adversely affect its business, results of operations and financial condition.
| 10 |
The cellular networks used by OmniMetrix are also subject to periodic technical updates that may require corresponding updates to, or replacement of, OmniMetrix’s monitoring equipment.
Cellular networks have evolved over time to offer more robust technical capabilities in both voice and data transmission. As new capabilities come online, it will be necessary to have equipment that can readily interface with the newer cellular networks to avoid negative impacts on customer service. Not all of the costs associated with OmniMetrix’s corresponding equipment upgrades can be passed on to customers, and any increased expenses are expected to have a negative impact on OmniMetrix’s operating results.
A substantial portion of OmniMetrix’s revenues is expected to be generated not from product sales, but from periodic monitoring fees and thus it is continually exposed to risks associated with its customers’ financial stability.
OmniMetrix sells on-going monitoring services to both PG and CP customers. It is therefore dependent on these customers continuing to timely pay service fees on an on-going basis. If a significant portion of these fees are not paid on a timely basis and/or are not renewed from year-to-year, OmniMetrix could expect to experience deterioration in its financial condition.
OmniMetrix’s ability to provide, and to collect revenues from, monitoring services is dependent on the reliability of cellular networks not controlled by OmniMetrix.
OmniMetrix provides monitoring services through the use of cellular and satellite technology utilizing the networks of third-party providers. These providers generally do not warrantee their services to either OmniMetrix or the end users, and any dropped transmissions could result in the loss of customer renewals and potential claims against OmniMetrix. There is no assurance that customers will not cancel monitoring services due to network issues.
OmniMetrix’s business is dependent on its ability to reliably store and manage data, but there can be no guarantee that it has sufficient capabilities to mitigate potential data loss in all cases.
The efficient operation of OmniMetrix’s business is dependent on its information technology systems. In addition, OmniMetrix’s ability to assist customers in analyzing data related to the performance of such customers’ power and cathodic protection monitoring systems is an important component of its customer value proposition. OmniMetrix utilizes Microsoft Azure cloud-hosted data servers utilizing accepted data and power monitoring and protection processes, but whether a data loss can be avoided cannot be assured in every case. OmniMetrix’s information technology systems are vulnerable to damage or interruption from natural disasters, sabotage (including theft and attacks by computer viruses or hackers), power outages, and computer systems, Internet, telecommunications or data network failure. Any interruption of OmniMetrix’s information technology systems could result in decreased revenue, increased expenses, increased capital expenditures, customer dissatisfaction and potential lawsuits, any of which could have a material adverse effect on its results of operations and financial condition.
Risks Related to Our Securities
Our stock price is highly volatile, and we do not expect to pay dividends on shares of our common stock for the foreseeable future. Investors may never obtain a return on their investment.
The market price of our common stock has fluctuated substantially in the past and is likely to continue to be highly volatile and subject to wide fluctuations. During 2025, our common stock traded at prices as low as $12.42 and as high as $33.00 per share. Fluctuations in our stock price may continue to occur in response to various factors, many of which we cannot control, including:
| ● | general economic and political conditions and specific conditions in the markets we address; | |
| ● | quarter-to-quarter variations in our operating results; | |
| ● | strategic investments or divestments; | |
| ● | announcements of changes in our senior management; | |
| ● | the gain or loss of one or more significant customers or suppliers; | |
| ● | announcements of technological innovations or new products by our competitors, customers or us; | |
| ● | the gain or loss of market share in any of our markets; | |
| ● | changes in accounting rules; | |
| ● | changes in investor perceptions; or | |
| ● | changes in expectations relating to our products, plans and strategic position or those of our competitors or customers. |
| 11 |
We do not intend to pay dividends to our stockholders in the foreseeable future. We intend to reinvest earnings, if any, in the development and expansion of our business. Accordingly, investors will need to rely on sales of their common stock after price appreciation, which may never occur, in order to realize a return on their investment.
Our share price may decline due to the large number of shares of our common stock eligible for future sale in the public market including shares underlying options.
Almost all of our outstanding shares of common stock are, or could upon exercise of options become, eligible for sale in the public market as described below. Sales of a substantial number of shares of our common stock in the public market, or the possibility of these sales, may adversely affect our stock price.
As of March 3, 2026, 2,506,501 shares of our common stock were issued and outstanding. As of that date, we had 66,758 options outstanding and exercisable with a weighted average exercise price of $9.06 per share, which if exercised would result in the issuance of additional shares of our common stock. In addition to the options noted above, at March 3, 2026, there were 57,178 options outstanding that have not yet vested and are not yet exercisable.
Substantially all of our currently outstanding shares and shares issuable under our outstanding options are or would be freely tradable.
We may have to offer additional securities for sale in the near future.
As of March 3, 2026, we had consolidated cash of $4,131,000 which we believe is sufficient for at least the next twelve months. Despite this, we may ultimately not have sufficient cash to allow us to execute our plans, and the occurrence of one or more unanticipated events may require us to make significant expenditures. Accordingly, we may need to raise additional amounts to finance our operations. If we were to do so by selling shares of our common stock and/or other securities convertible into shares of our common stock, current investors may incur dilution in the value of their shares.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 1C. CYBERSECURITY
Securing
our business information, intellectual property, customer and employee data, and technology systems is essential for the continuity of
our business, meeting applicable regulatory requirements and maintaining the trust of our stockholders.
To
help protect us from a major cybersecurity incident that could have a material impact on operations or our financial results, we have
implemented policies, programs and controls, including technology investments that focus on cybersecurity incident prevention, identification
and mitigation.
Our
Board of Directors is actively engaged in overseeing and reviewing our strategic direction and objectives, taking into account, among
other considerations, our risk profile and related exposures, including oversight of risks from cybersecurity threats.
| 12 |
ITEM 2. PROPERTIES
OmniMetrix’s activities are currently conducted in approximately 21,000 square feet of office and production space in the Hamilton Mill Business Park located in Buford, Georgia, under a lease that was amended on June 20, 2025 to extend the lease term through November 30, 2030. The annual operating lease expense was $184,000 in 2025 and $129,000 in 2024. For 2026, the annual operating lease expense will be $216,000 for the year ending through December 31, 2026. OmniMetrix is currently utilizing only a portion of these leased facilities.
On July 6, 2021, the Company entered into an agreement with King Industrial Realty, Inc. to sublease from the Company 1,900 square feet of the Company’s 21,000 square feet office and production space in the Hamilton Mill Business Park located in Buford, Georgia. This sublease was amended on August 15, 2025 to extend the term through September 30, 2028 and to provide a monthly sublease payment of $3,374 plus annual escalators (the average monthly sublease payment in 2025 was $2,790), which includes the base rent plus a pro-rata share of utilities, property taxes and insurance. Fifty percent of any excess rent received above the per square foot amount that the Company pays will be remitted to the Company’s landlord less the allocation of any shared expenses and leasehold improvements specific to the sublease. After the offset of the investment in leasehold improvements and other expenses related to the sublease, the total amount payable to our landlord under the sublease was $8,295 for the year ended December 31, 2025, and $6,680 for the year ended December 31, 2024.
Below are the future payments (in thousands) expected to be received from King Industrial Realty, Inc. under the sublease. The Company expects to remit fifty percent of these amounts net of the annual service cost of approximately $2,600 to our landlord.
| Year ended December 31, | ||||
| 2026 | 41 | |||
| 2027 | 42 | |||
| 2028 | $ | 33 | ||
| Total undiscounted cash flows | $ | 116 | ||
ITEM 3. LEGAL PROCEEDINGS
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
| 13 |
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information
Our common stock is traded under the symbol “ACFN” on NASDAQ.
Holders
As of March 3, 2026, the last reported sales price of our common stock on NASDAQ was $22.50, there were 57 record holders of our common stock, and we estimate that there were approximately 2,500 beneficial owners of our common stock.
ITEM 6. [RESERVED.]
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview and Trend Information
The following discussion includes statements that are forward-looking in nature. Whether such statements ultimately prove to be accurate depends upon a variety of factors that may affect our business and operations. Certain of these factors are discussed in “Item 1A. Risk Factors.”
All dollar amounts in the discussion below are rounded to the nearest thousand and, thus, are approximate.
We currently operate in two reportable operating segments, both of which are performed through our OmniMetrix subsidiary:
| ● | Power Generation (“PG”). OmniMetrix’s PG services provide wireless remote monitoring and control systems and IoT applications for commercial/industrial and residential power generation equipment. In 2025, we launched the Omni family of products—the OmniPro commercial monitor and the Omni residential monitor—built on a new proprietary common communications core called the OCOM. These products are replacing our legacy TrueGuard product lines, offering enhanced flexibility, expandability, and improved connectivity with easier installation. OmniMetrix also offers the Smart Annunciator product for commercial customers who require a visual representation of generator status via a touchscreen display. | |
| ● | Cathodic Protection (“CP”). OmniMetrix’s CP services provide remote monitoring and control products for cathodic protection systems on gas pipelines serving the gas utilities market and pipeline operators. The CP product lineup includes solutions to remotely monitor and control rectifiers, test stations and bonds. In 2025, we launched the RADex, an OCOM-based expansion of our RAD™ (Remote AC Mitigation Disconnect) that adds cathodic protection measurements while retaining the ability to remotely disconnect/connect AC mitigation tools on solid-state decouplers, reducing expense and increasing employee safety. |
The following analysis should be read together with the segment information provided in Notes 12 and 13 to our consolidated financial statements included in this report.
OmniMetrix
Following the emergence of machine-to-machine (“M2M”) and IoT applications whereby companies aggregate multiple sensors and monitors into a simplified dashboard for customers, OmniMetrix believes it plays a key role in this economic ecosystem. In addition, OmniMetrix continues to see a growing need for backup power infrastructure to secure critical military, government, and private sector assets against emergency events including grid outages, natural disasters, cybersecurity threats and terrorist attacks. Commercial, industrial and residential standby generators, turbines, compressors, pumps, pumpjacks, light towers and other industrial equipment are part of the critical infrastructure increasingly becoming monitored in IoT applications. OmniMetrix solutions monitor critical equipment used by cell towers, manufacturing plants, medical facilities, data centers, retail stores, public transportation systems, energy distribution and federal, state and municipal government facilities, in addition to residential back-up generators. Given that OmniMetrix monitors all major brands of critical equipment and continues to invest in research and development in response to customer and potential customer feedback, OmniMetrix remains well positioned as a competitive participant in this market to continue to grow its customer base and expand its product offerings.
| 14 |
Other Matters
On June 1, 2024, we entered into a contract (the “Material Contract”) with one of the nation’s largest cell phone providers to provide monitoring hardware and services. Under the contract, OmniMetrix has provided monitoring devices and related remote monitoring and control services for between 5,000 and 10,000 cell tower backup generators in the U.S. Shipping of hardware commenced in the third quarter of 2024 and installation and monitoring services commenced in the fourth quarter of 2024. During the year ended December 31, 2025, we recognized $2,293,000 in hardware revenue and $452,000 in first-year monitoring revenue from this contract. During the year ended December 31, 2024, we recognized $1,637,000 in hardware revenue and $21,000 in first-year monitoring revenue from this contract. We have shipped all hardware that has been ordered under this contract to date. We will continue to have annual renewal monitoring revenue on these units each year for all connected units.
Critical Accounting Estimates
In preparing the financial statements, management is required to make estimates and assumptions that have an impact on the asset, liability, revenue and expense amounts reported. These estimates can also affect our supplemental information disclosures, including information about contingencies, risk and financial condition. We believe, given current facts and circumstances, that our estimates and assumptions are reasonable, adhere to U.S. GAAP, and are consistently applied. Inherent in the nature of an estimate or assumption is the fact that actual results may differ from estimates and estimates may vary as new facts and circumstances arise. We make routine estimates and judgments in determining net realizable value of accounts receivable, inventories, property and equipment, prepaid expenses, product warranties and other reserves as well as the amortization period for deferred commissions payable. Management believes our most critical accounting estimates and assumptions are in the area of valuation allowance.
Valuation Allowance
We regularly review our deferred tax assets for recoverability considering historically profitability, projected future taxable income, the expected timing of the reversals of existing temporary differences and tax planning strategies. In assessing the need for a valuation allowance, we consider both positive and negative evidence related to the likelihood of realization of the deferred tax assets. The weight given to the positive and negative evidence is commensurate with the extent to which the evidence may be objectively verified.
We record a valuation allowance to reduce our deferred tax assets to the net amount that we believe is more likely than not to be realized. The net carrying amount of the Company’s deferred tax assets is based on the Company’s belief that it is more likely than not that the Company will generate sufficient future taxable income in certain jurisdictions to realize these deferred tax assets. The ultimate realization of the deferred tax assets depends upon our ability to generate sufficient taxable income in the future. In forecasting future taxable income, management’s projections and beliefs are based upon a variety of estimates and numerous assumptions made by our management with respect to, among other things, interest rates, forecasted revenue of the hardware sales and monitoring revenue or revenue streams that could generate sufficient income. In evaluating our ability to recover our deferred tax assets, we consider and weigh all available positive and negative evidence, including our past operating results, the existence of cumulative losses in the most recent years and our forecast of future taxable income. When the likelihood of the realization of existing deferred tax assets changes, adjustments to the valuation allowance are charged in the period in which the determination is made. If our estimates and assumptions change in the future, the Company may be required to record additional valuation allowances against its deferred tax assets, resulting in additional income tax expense in the Company’s Consolidated Statements of Operations, or conversely to reduce the existing valuation allowance resulting in less income tax expense.
The Company currently has a three-year cumulative income position which is positive evidence that it is more likely than not the deferred tax assets will be realized. As of December 31, 2025, we believe, based on our projections, that a partial valuation allowance of $10,326,000, continues to be necessary against our deferred tax assets. Uncertainty exists related to the generation of future hardware and monitoring revenue, nonetheless the Company believes sufficient positive evidence exists which supports the partial reversal of the valuation allowance. At this time, however, we cannot assure you that we will be successful in doing so. Accordingly, our management will continue to assess the need for this valuation allowance and will make adjustments when appropriate.
Future changes in the Company’s stock ownership, which may be outside of the Company’s control or future equity offerings or acquisitions that have equity as a component of the purchase price consideration may trigger an “ownership change” and the utilization of the Company’s federal and state net operating losses may be subject to a limitation under the Internal Revenue Code, as well as similar state provisions. Such limitations may result in the expiration of net operating loss (NOL) carryforwards before their utilization.
| 15 |
Results of Operations
The selected consolidated statement of operations data for the years ended December 31, 2025 and 2024 and consolidated balance sheet data as of December 31, 2025 and 2024 has been derived from our audited consolidated financial statements included in this Annual Report.
This data should be read in conjunction with our consolidated financial statements and related notes included herein.
Selected Consolidated Statement of Operations Data:
| For the Years Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| (in thousands, except per share data) | ||||||||
| Revenue | $ | 11,478 | $ | 10,986 | ||||
| COGS | 2,663 | 2,987 | ||||||
| Gross profit | 8,815 | 7,999 | ||||||
| R&D expense | 1,094 | 1,012 | ||||||
| SG&A expense | 5,732 | 5,050 | ||||||
| Operating income | 1,989 | 1,937 | ||||||
| Interest income, net | 121 | 73 | ||||||
| Income before income taxes | 2,110 | 2,010 | ||||||
| Current state tax expense | (30 | ) | (123 | ) | ||||
| Deferred income tax benefit | 464 | 4,435 | ||||||
| Net income after income taxes | 2,544 | 6,322 | ||||||
| Non-controlling interest share of income | (34 | ) | (28 | ) | ||||
| Net income attributable to Acorn Energy, Inc. stockholders | $ | 2,510 | $ | 6,294 | ||||
| Basic and diluted net income per share attributable to Acorn Energy, Inc. stockholders: | ||||||||
| Net income per share attributable to Acorn Energy, Inc. stockholders – basic | $ | 1.01 | $ | 2.53 | ||||
| Net income per share attributable to Acorn Energy, Inc. stockholders – diluted | $ | .99 | $ | 2.51 | ||||
| Weighted average number of shares outstanding attributable to Acorn Energy, Inc. stockholders – basic | 2,496 | 2,487 | ||||||
| Weighted average number of shares outstanding attributable to Acorn Energy, Inc. stockholders – diluted | 2,538 | 2,512 | ||||||
The following table sets forth certain information with respect to revenues and profits of our reportable business segments for the years ended December 31, 2025 and 2024 (dollars in thousands), including the percentages of revenues attributable to such segments. (See Note 12 to our consolidated financial statements for the definitions of our reporting segments).
| PG | CP | Total | ||||||||||
| Year ended December 31, 2025: | ||||||||||||
| Revenues from customers | $ | 10,741 | $ | 737 | $ | 11,478 | ||||||
| Percentage of total revenues by segment | 94 | % | 6 | % | 100 | % | ||||||
| Segment gross profit | $ | 8,344 | $ | 471 | $ | 8,815 | ||||||
| Year ended December 31, 2024: | ||||||||||||
| Revenues from customers | $ | 9,882 | $ | 1,104 | $ | 10,986 | ||||||
| Percentage of total revenues by segment | 90 | % | 10 | % | 100 | % | ||||||
| Segment gross profit | $ | 7,334 | $ | 665 | $ | 7,999 | ||||||
| 16 |
2025 Compared to 2024
Revenue. In 2025, OmniMetrix recorded total revenue of $11,478,000, as compared to total revenue of $10,986,000 in 2024, for an increase of $492,000 (5%). The PG segment includes our monitoring device for generators, industrial air compressors and our annunciator products. The CP segment includes our monitoring device for cathodic protection systems on gas pipelines serving the gas utilities market and pipeline operators. In 2025, revenue of $10,741,000 was attributed to the PG segment and revenue of $737,000 was attributed to the CP segment, as compared to the 2024 revenue of $9,882,000 that was attributed to the PG segment and $1,104,000 that was attributed to the CP segment. Hardware revenue decreased $515,000 (8%) from $6,433,000 during the year ended December 31, 2024 to $5,918,000 during the year ended December 31, 2025. The decrease in total hardware revenue during the year ended December 31, 2025 is further detailed in the table below:
| Reconciliation of Hardware Revenue | 2025 | 2024 | ||||||
| Amortization of deferred revenue | $ | 956 | $ | 1,841 | ||||
| Sales of custom designed units and related accessories | 183 | 26 | ||||||
| Hardware sales under the Material Contract | 2,293 | 1,637 | ||||||
| Hardware sales | 1,944 | 2,378 | ||||||
| Other accessories, services, shipping and miscellaneous charges | 542 | 551 | ||||||
| Total hardware revenue | $ | 5,918 | $ | 6,433 | ||||
PG hardware revenue decreased $155,000 (3%) during the year ended December 31, 2025 to $5,424,000 compared to $5,579,000 during the year ended December 31, 2024. We also had a decrease in CP hardware revenue of $360,000 (42%) to $494,000 during the year ended December 31, 2025 from $854,000 during the year ended December 31, 2024. Monitoring revenue increased $1,007,000 (22%) from $4,553,000 in the year ended December 31, 2024 to $5,560,000 in the year ended December 31, 2025. The increase in monitoring revenue was due to an increase in the number of connections being monitored and growth in our customer base.
Gross profit. Gross profit was $8,815,000, reflecting a 77% gross margin on revenue in 2025, compared with a gross profit of $7,999,000, reflecting a 73% gross margin on revenue in 2024. The gross margin increased to 77% in 2025 due to sales of the new Omni and OmniPro products which have a higher gross margin than the older model hardware products and due to higher monitoring revenue, which has a 95% gross margin, as a result of more connections. Gross margin on hardware revenue for the year ended December 31, 2025 was 60% compared to 57% for the year ended December 31, 2024. Gross margin on monitoring revenue was 94% for the year ended December 31, 2025 compared to 94% for the year ended December 31, 2024.
R&D expense. During 2025, OmniMetrix recorded $1,094,000 of R&D expense as compared to $1,012,000 in 2024, an increase of $82,000 (8%). The increase in R&D expense in 2025 is related to increases in wages and bonuses paid to our engineering personnel in 2025 as well as an addition to our engineering team in the fourth quarter of 2024. This increase was offset by the reduction of third-party consultant expenses due to the completion of the recent launch of the Omni and OmniPro, which had been a significant development project, and an addition to our in-house senior engineering staff. We expect a moderate increase in R&D expense for 2026 due to engineering salary increases granted effective January 1, 2026, and for continued investment in work on certain initiatives to continue to redesign certain older products and expand product lines to increase our level of innovation ahead of our competitors.
SG&A expense. Consolidated SG&A expense increased $682,000 from 2024 to 2025. Corporate overhead increased by $360,000 (35%), from $1,020,000 in 2024 to $1,380,000 in 2025. The increase in corporate overhead was due to an increase of (i) $128,000 in tax professional fees from the preparation of the 2024 and the quarterly 2025 income tax provision, the calculations related to the release of the income tax valuation allowance, and the preparation of an updated 382 Study, (ii) $115,000 in expenses related to uplisting to NASDAQ which includes the NASDAQ application fee, the prorated listing fee and the legal fees associated with the uplisting process, (iii) $75,000 in stock compensation expense, (iv) $19,000 in audit fees primarily related to the work on the release of the income tax valuation allowance at December 31, 2024, and (v) a net increase of $23,000, in the aggregate, of other public company expenses.
OmniMetrix’s SG&A expense increased $322,000 (8%), from $4,030,000 in 2024 to $4,352,000 in 2025. This increase was primarily due to increases of (i) $215,000 in personnel expenses, (ii) $66,000 in IT consulting and staff augmentation fees, (iii) $58,000 in facilities expense due to the lease amendment for our office space, and (iv) $57,000 in net aggregate expenses in other categories offset by decreases in (i) commission expenses of $61,000 and (ii) $13,000 in travel and trade show expenses. We anticipate that our annual SG&A costs in 2026 will increase by approximately 9% primarily due to the increase in our facility lease expense pursuant to the lease amendment executed in June 2025 to extend the lease to November 2030 and also to increasing wage and benefit expenses as a result of merit increases effective in January 2026.
| 17 |
Interest income, net. Interest income in the year ended December 31, 2025 was $121,000 compared to $73,000 in the year ended December 31, 2024. The increase was due to higher average cash balances during the year on which interest was earned.
Income taxes. For the year ended December 31, 2025, the Company recorded an income tax benefit of $464,000, offset by current state income tax expense of $30,000, compared to an income tax benefit of $4,435,000, offset by current state income tax expense of $123,000, for the year ended December 31, 2024. The change in the income tax benefit was due to changes in the Company’s valuation allowance. The recorded income tax benefit contributed $0.19 to our basic earnings per share of $1.01, and $0.18 of our diluted earnings per share of $0.99, at December 31, 2025. At December 31, 2024, the recorded income tax benefit contributed $1.78 to our basic earnings per share of $2.53, and $1.77 of our diluted earnings per share of $2.51.
Net income attributable to Acorn Energy. We had net income attributable to Acorn of $2,510,000 in 2025 compared to $6,294,000 in 2024. Our net income in 2025 is comprised of net income at OmniMetrix of $3,488,000, corporate expense of $1,378,000, current state income tax expense of $30,000, the non-controlling interest share of our net income in OmniMetrix of $34,000 offset by deferred income tax benefit as a result of the release of our valuation allowance of $464,000. Our income in 2024 is comprised of net income at OmniMetrix of $3,027,000, corporate expense of $1,017,000, current state income tax expense of $123,000, the non-controlling interest share of our net income in OmniMetrix of $28,000, offset by deferred income tax benefit as a result of the release of our valuation allowance of $4,435,000. Net operating income increased by $100,000 but net income decreased by $3,784,000 primarily due to the decrease in the positive impact of the valuation allowance.
Liquidity and Capital Resources
At December 31, 2025, we had working capital of $3,157,000. Our working capital includes $4,454,000 of cash and deferred revenue of $3,097,000. Such deferred revenue does not require a significant cash outlay for the revenue to be recognized. Total deferred revenue decreased by $824,000, from $4,233,000 at December 31, 2024 to $3,409,000 at December 31, 2025, as a result of the sales mix of products sold. Based on the current products being sold, the Company expects continued decreases in the deferred hardware revenue balance in the foreseeable future. Net cash increased during the year ended December 31, 2025 by $2,128,000, of which $2,090,000 was provided by operating activities, $33,000 was used in investing activities, and $71,000 was provided by financing activities.
During the year ended December 31, 2025, our operating activities provided $2,090,000 of net cash. Our OmniMetrix subsidiary provided $3,513,000 from its operations while our corporate headquarters used $1,423,000 in its operating activities during the period. OmniMetrix’s inventory balance increased by $818,000 at December 31, 2025 as compared to December 31, 2024 primarily related to purchases made for production of our recently launched redesigned product versions, Omni and OmniPro. During the year ended December 31, 2024, our operating activities provided $905,000 of net cash. Our OmniMetrix subsidiary provided $1,991,000 from its operations while our corporate headquarters used $1,086,000 in its operating activities during the period.
During the year ended December 31, 2025, net cash of $33,000 was used in investing activities, primarily related to computer equipment purchases for technology upgrades. During the year ended December 31, 2024, net cash of $56,000 was used in investing activities.
Net cash of $71,000 and $28,000 was provided by financing activities during the years ended December 31, 2025 and 2024, respectively, which represents proceeds from the exercise of stock options, net of $16,000 used for stock repurchases in the year ended December 31,2025.
Other Liquidity Matters
We had $4,454,000 of cash on December 31, 2025, and $4,131,000 on March 3, 2026. We believe that such cash, plus the cash expected to be generated from operations, will provide sufficient liquidity to finance the corporate activities of Acorn and the operating activities of OmniMetrix at their current level of operations for at least the twelve-month period from the issuance of the audited consolidated financial statements contained in this Annual Report. We may, at some point, elect to obtain a new line of credit or other source of financing to fund additional investments in the business. If we decide to pursue additional financing in the future, it may be in the form of a bank line, a new loan or investment by others, an equity raise by Acorn, which could then facilitate a loan by Acorn to OmniMetrix, or any combination thereof. Whether alternative funds, such as third-party loans or investments, will be available at the time required and on terms acceptable to Acorn and OmniMetrix cannot be determined at this time.
| 18 |
Contractual Obligations and Commitments
The table below provides information concerning obligations under certain categories of our contractual obligations as of December 31, 2025.
Cash Payments Due to Contractual Obligations
| Years Ending December 31, (in thousands) | ||||||||||||||||
| Total | 2026 | 2027-2028 | 2029-2030 | |||||||||||||
| Operating leases* | $ | 1,208 | $ | 216 | $ | 488 | $ | 504 | ||||||||
| Contractual services | 217 | 202 | 15 | — | ||||||||||||
| Purchase obligations** | 434 | 434 | — | — | ||||||||||||
| Total contractual cash obligations | $ | 1,859 | $ | 852 | $ | 503 | $ | 504 | ||||||||
*Reflects the gross amount of the operating lease liabilities. Imputed interest is $166,000 resulting in $158,000 included in current liabilities. Does not include rent amounts to be received under the sublease.
**Reflects open purchase orders for components/parts to be delivered over the next twelve months as sales forecast requires.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
As a smaller reporting company, we are not required to provide information required by this Item.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Furnished at the end of this report commencing on page F-1.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our CEO and CFO, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this annual report on Form 10-K. Based on this evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of December 31, 2025.
Internal Control Over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of our management, including our CEO and CFO, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2025, based upon the document “Internal Control - Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based upon this assessment and those criteria, management concluded that our internal control over financial reporting was effective as of December 31, 2025.
The Company employs a decentralized internal control methodology, coupled with management’s oversight, whereby its subsidiary is responsible for mitigating its risks to financial reporting by implementing and maintaining effective control policies and procedures and subsequently translating that respective risk mitigation up and through to the parent level and to the Company’s external consolidated financial statements. Also, as the Company’s subsidiary is not large enough to effectively mitigate certain risks by segregating incompatible duties, management must employ compensating mechanisms throughout the Company in a manner that is feasible within the constraints it operates.
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Changes in Internal Control Over Financial Reporting
During the year ended December 31, 2024, we have implemented the following (i) a process pursuant to which System and Organization Controls (SOC) reports are obtained from third-party vendors on a recurring schedule and such reports are evaluated for any issues, (ii) provisioning/termination controls with signed and authenticated authorizations, and (iii) change controls for development processes that require authorizations, peer review, quality assurance documentation, ticket matching of changes to work authorizations and overall change controls. Management has concluded, through testing, that these added controls and related actions effectively remediated the previously identified material weaknesses and that these controls are operating effectively.
Other than the remediation actions described above, there were no other changes in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
During
the fourth quarter of fiscal year 2025, none of our directors or officers
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Directors and Executive Officers
Set forth below is certain information concerning the directors and certain officers of the Company:
| Name | Age | Position | ||
| Jan H. Loeb | 67 | Director, President and Chief Executive Officer of Acorn Energy, Inc. and Acting CEO of OmniMetrix | ||
| Gary Mohr | 67 | Director and member of our Audit, Nominating and Compensation Committees | ||
| Michael F. Osterer | 80 | Director and member of our Audit, Nominating and Compensation Committees | ||
| Peter Rabover | 45 | Director | ||
| Samuel M. Zentman | 80 | Director, Chairman of our Audit Committee and member of our Nominating and Compensation Committees | ||
| Tracy S. Clifford | 57 | Chief Financial Officer of Acorn Energy, Inc. and COO of OmniMetrix |
Jan H. Loeb has served as our President and CEO since January 28, 2016 and as Acting CEO of OmniMetrix since December 1, 2019. He was appointed to our Board in August 2015 pursuant to the terms of our loan and security agreement with Leap Tide Capital Partners III, LLC (the “Leap Tide Loan Agreement”). He was also appointed to the Board of our then subsidiary DSIT in August 2015 pursuant to the terms of the Leap Tide Loan Agreement and held that position until the sale of our remaining interest in DSIT in February 2018. Mr. Loeb has more than 40 years of money management and investment banking experience. He has been the Managing Member of Leap Tide Capital Management LLC since 2007. From 2005 to 2007, he served as the President of Leap Tide’s predecessor, Leap Tide Capital Management Inc., which was formerly known as AmTrust Capital Management Inc. He served as a Portfolio Manager of Chesapeake Partners from February 2004 to January 2005. From January 2002 to December 2004, he served as Managing Director at Jefferies & Company, Inc. From 1994 to 2001, he served as Managing Director at Dresdner Kleinwort Wasserstein, Inc. (formerly Wasserstein Perella & Co., Inc.). He served as a Lead Director of American Pacific Corporation from July 8, 2013 to February 27, 2014, and also served as its Director from January 1997 to February 27, 2014. He served as an Independent Director of Pernix Therapeutics Holdings Inc. (formerly, Golf Trust of America, Inc.) from 2006 to August 31, 2011. He served as a Director of TAT Technologies, Ltd. from August 2009 to December 21, 2016. He served as a Director of Keweenaw Land Association, Ltd. from December 2016 until May 2019. He has served as President, Executive Chairman and board member of NovelStem International Corp since July 2018, and as a board member of Gyrodyne, LLC since July 2023.
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Key Attributes, Experience and Skills. Mr. Loeb brings to the Acorn Board significant financial expertise, cultivated over more than 40 years of money management and investment banking experience, together with a background in public company management and audit committee experience.
Gary Mohr was elected to the Board in August 2018 and is a member of our Audit, Compensation and Nominating Committees. Mr. Mohr is President of UE Systems, Incorporated, an international technology company specializing in the field of plant asset reliability through ultrasound. Mr. Mohr started with UE Systems in 1988 as a salesman and rapidly progressed through the ranks as regional sales manager, National Sales Manager, Vice President and eventually President of the company. It is through Mr. Mohr’s stewardship that UE Systems has grown from a national brand to an international company with offices in Toronto, Mexico City, Hong Kong, India and the Netherlands, and developed a list of loyal customers, including those in the Fortune 500.
Key Attributes, Experience and Skills. Mr. Mohr brings to the Board a broad range of operational and managerial experience, including a successful track record in product development and marketing leadership.
Michael F. Osterer was elected to the Board in August 2018 and is a member of our Audit, Compensation and Nominating Committees. He served as an advisor to our Board from October 2017 until his election as director. Since 1973, Mr. Osterer has served as Chairman of the Board of UE Systems, Incorporated, a leader in the field of plant asset reliability through ultrasound, which he founded in 1973. He also served as President of UE Systems from 1973 to 1985. Since 1987, Mr. Osterer has served as President of Libom Oil, an oil exploration, drilling and purchasing company, which he founded in 1987. He is the Acting Chairman of the Board of Radon Testing Corporation of America, Inc., which he founded in 1985 and where he served as President from 1985 through 1989. Mr. Osterer also founded Westchester Consultants, a general business consultancy nationally recognized for branding expertise of food products. He served in the United States Air Force/Air National Guard, 105th Airborne Division, from 1964 through 1970. Mr. Osterer graduated from Fordham University with a BA in Social Sciences, Magna Cum Laude.
Key Attributes, Experience and Skills. Mr. Osterer brings to Acorn a wealth of operational and managerial experience gained over his long history of successful entrepreneurial pursuits, corporate leadership and oversight.
Peter Rabover was appointed to the Board in March 2023. Mr. Rabover is currently the CFO and Corporate Secretary of Grodivo.ai, a corporate culture measurement software company. He has been an active buyside investor for over 20 years, and is currently the Managing Director of Artko Capital LP, a partnership focused on microcap investments, which is a role he has held since he founded the partnership in 2015. In such capacity, Mr. Rabover has advised on a wide range of corporate finance activities for dozens of companies. Prior to founding Artko Capital, he worked for Scharf Investments from 2012 to 2014, and Hahn Capital Management from 2005 to 2011 in an analyst capacity. He served in the United States Peace Corps in Kazakhstan from 2003 to 2005 as an Economic Development Volunteer. Mr. Rabover started his career as an auditor for United States Steel Corporation from 2001 to 2003. He holds an undergraduate degree from Duquesne University, a Masters of Business Administration from the University of Virginia’s Darden School of Business and is a CFA Charterholder.
Key Attributes, Experience and Skills. Mr. Rabover brings a wide range of corporate finance, audit and capital allocation acumen and experience as well as a unique shareholder perspective gained through a long career of managing outside capital and finding successful investments.
Samuel M. Zentman has been one of our directors since November 2004 and currently serves as Chairman of our Audit Committee and as a member of our Compensation and Nominating Committees. From 1980 until 2006, Dr. Zentman was the president and chief executive officer of a privately held textile firm, where he also served as vice president of finance and administration from 1978 to 1980. From 1973 to 1978, Dr. Zentman served in various capacities in the Information Systems department at American Motors Corporation including Director of the Corporate Data Center and the Engineering Computer Centers. He holds a Ph.D. in Complex Analysis. Dr. Zentman serves on the board of Klotho Neurosciences, as well as several national charitable organizations devoted to advancing the quality of education.
Key Attributes, Experience and Skills. Dr. Zentman’s long-time experience as a businessman together with his experience with computer systems and software enables him to bring valuable insights to the Board. Dr. Zentman has a broad, fundamental understanding of the business drivers affecting our Company and also brings leadership and oversight experience to the Board.
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Tracy S. Clifford has served as the Company’s Chief Financial Officer since June 1, 2018 and as the COO of OmniMetrix since December 1, 2019. She serves in such positions pursuant to a Consulting Agreement between the Company and Tracy Clifford Consulting, LLC. Ms. Clifford is President and Owner of Tracy Clifford Consulting, LLC, through which she has been providing contract CFO/COO services and other advisory services and project engagements since June 2015. Between October 1999 and May 2015, she served as CFO, Principal Accounting Officer, Corporate Controller and Secretary for a publicly traded pharmaceutical company and a publicly traded REIT. Her prior experience includes accounting leadership positions at United Healthcare (Atlanta) and the North Broward Hospital District (Fort Lauderdale) and work on the audit team of Deloitte & Touche (Miami). Ms. Clifford has served as a board member of Novelstem International Corp since July 2018. Ms. Clifford obtained a Bachelor of Science degree in accounting from the College of Charleston and a master’s degree in business administration with a concentration in finance from Georgia State University. Ms. Clifford is a licensed CPA in the state of South Carolina and holds a certification in the fundamentals of forensic accounting from the AICPA.
Key Attributes, Experience and Skills. Ms. Clifford brings to the Company over 20+ years as a public company chief financial/accounting officer together with Big 4 public accounting experience and a broad scope of operational experience.
Audit Committee; Audit Committee Financial Expert
The Company has a separate designated standing Audit Committee established and administered in accordance with SEC rules. The three members of the Audit Committee are Samuel M. Zentman (who serves as Chairman of the Audit Committee), Gary Mohr and Michael F. Osterer. The Board of Directors has determined that each member of the Audit Committee meets the independence criteria prescribed by NASDAQ governing the qualifications for audit committee members and each Audit Committee member meets NASDAQ’s financial knowledge requirements. Our Board has determined that Dr. Zentman qualifies as an “audit committee financial expert,” as defined in the rules and regulations of the SEC.
Compensation Committee
Our executive compensation is administered by the Compensation Committee of the Board of Directors. The members of the Compensation Committee are Gary Mohr, Michael F. Osterer and Samuel M. Zentman, all of whom have been determined by the Board to be independent in accordance with NASDAQ’s requirement for independent director oversight of executive officer compensation.
Nominating Committee
The Nominating Committee of our Board of Directors has overall responsibility for identifying, evaluating, recruiting and selecting qualified candidates for election, re-election or appointment to the Board. The Members of the Nominating Committee are Gary Mohr, Samuel M. Zentman and Michael Osterer, all of whom have been determined by the Board to meet the independence criteria prescribed by NASDAQ governing the qualifications of nominating committee members.
Our stockholders may recommend potential director candidates by contacting the Secretary of the Company to receive a copy of the procedure to recommend a potential director candidate for consideration by the Nominating Committee, who will evaluate recommendations from stockholders in the same manner that they evaluate recommendations from other sources.
Section 16(a) Beneficial Ownership Reporting Compliance; Delinquent Section 16(a) Reports
Section 16(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) requires our executive officers and directors, and persons who own more than 10% of a registered class of our equity securities to file reports of ownership and changes in ownership with the SEC. These persons are also required by SEC regulation to furnish us with copies of all Section 16(a) forms they file. Further, we have implemented measures to ensure timely filing of Section 16(a) reports by our executive officers and directors. Based solely on our review of such forms or written representations from certain reporting persons, we believe that during 2025 our executive officers and directors complied with the filing requirements of Section 16(a).
Code of Ethics
We have adopted a Code of Business Conduct and Ethics that applies to all our directors, officers and employees. This code of ethics is designed to comply with the NASDAQ marketplace rules related to codes of conduct. Our code of ethics may be accessed under “Investor Relations” on our website at www.acornenergy.com. We also intend to satisfy any disclosure requirement under Item 5.05 on Form 8-K regarding an amendment to, or waiver from, a provision of our code of ethics by posting such information on our website, www.acornenergy.com.
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Insider Trading Policy
We have adopted an Insider Trading Policy governing the purchase, sale and/or other dispositions of our securities by directors, officers and employees, and by the Company itself, that are reasonably designed to promote compliance with insider trading laws, rules and regulations, and any listing standards applicable to us. A copy of the policy is filed as Exhibit 19.1 to this Annual Report on Form 10-K.
ITEM 11. EXECUTIVE COMPENSATION
Executive and Director Compensation
Summary Compensation Table
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Option Awards ($) | All Other Compensation ($) | Total ($) | |||||||||||||||||
| Jan H. Loeb | 2025 | 321,360 | (3) | — | 37,417 | (5) | — | 358,777 | |||||||||||||||
| President and CEO of the Company and Acting CEO of OmniMetrix (1) | 2024 | 321,360 | (3) | — | 13,009 | (6) | — | 334,369 | |||||||||||||||
| Tracy S. Clifford | 2025 | 216,300 | (4) | — | 38,250 | (7) | — | 254,550 | |||||||||||||||
| CFO of the Company and COO of OmniMetrix (2) | 2024 | 216,300 | (4) | — | 13,009 | (8) | — | 229,309 | |||||||||||||||
| (1) | Mr. Loeb began serving as President and CEO of the Company on January 28, 2016 and as Acting CEO of OmniMetrix on December 1, 2019. | |
| (2) | Ms. Clifford began serving as CFO of the Company on June 1, 2018 and as COO of OmniMetrix on December 1, 2019. | |
| (3) | Represents the consulting fee paid for the provision of Mr. Loeb’s services to the Company as President and CEO of the Company and Acting CEO of OmniMetrix. | |
| (4) | Represents the consulting fee paid for the provision of Ms. Clifford’s services as CFO of the Company and COO of OmniMetrix. | |
| (5) | Represents the grant date fair value calculated in accordance with applicable accounting principles with respect to 2,200 options granted on January 6, 2025 with an exercise price of $17.50. The fair value of the options was determined using the Black-Scholes option pricing model using the following assumptions: (i) a risk-free interest rate of 4.4% (ii) an expected term of 5.6 years (iii) an assumed volatility of 181.8% and (iv) no dividends. | |
| (6) | Represents the grant date fair value calculated in accordance with applicable accounting principles with respect to 2,200 options granted on January 2, 2024 with an exercise price of $6.09. The fair value of the options was determined using the Black-Scholes option pricing model using the following assumptions: (i) a risk-free interest rate of 4.0% (ii) an expected term of 4.9 years (iii) an assumed volatility of 194.1% and (iv) no dividends. | |
| (7) | Represents the grant date fair value calculated in accordance with applicable accounting principles with respect to 2,200 options granted on January 1, 2025 with an exercise price of $17.89. The fair value of the options was determined using the Black-Scholes option pricing model using the following assumptions: (i) a risk-free interest rate of 4.4% (ii) an expected term of 5.6 years (iii) an assumed volatility of 181.8% and (iv) no dividends. | |
| (8) | Represents the grant date fair value calculated in accordance with applicable accounting principles with respect to 2,200 options granted on January 2, 2024 with an exercise price of $6.09. The fair value of the options was determined using the Black-Scholes option pricing model using the following assumptions: (i) a risk-free interest rate of 4.0% (ii) an expected term of 4.9 years (iii) an assumed volatility of 194.1% and (iv) no dividends. |
Executive Compensation for 2025 and 2024
Jan H. Loeb. On January 6, 2025, the Company entered into a new consulting agreement (the “2025 Loeb Consulting Agreement”) extending its arrangements for compensation of Mr. Loeb. Pursuant to the 2025 Loeb Consulting Agreement, Mr. Loeb received cash compensation of $16,780 per month for service as President and CEO of Acorn, and an additional $10,000 per month for service as Acting CEO of OmniMetrix. Mr. Loeb also received a grant of options on January 6, 2025 to purchase 2,200 shares of the Company’s common stock, which are exercisable at an exercise price equal to the January 3, 2025, closing price of the common stock of $17.50 per share. Twenty-five percent (25%) of the options were vested immediately; the remaining options vested in three equal increments on April 1, 2025, July 1, 2025 and October 1, 2025. The exercise period and other terms are otherwise substantially the same as the terms of the options granted by the Company to its outside directors. The 2025 Loeb Consulting Agreement expired on December 31, 2025. The Company and Mr. Loeb entered into a new consulting agreement for 2026 as described below under Employment Arrangements.
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On January 2, 2024, the Company entered into a consulting agreement (the “2024 Loeb Consulting Agreement”) extending its arrangements for compensation of Mr. Loeb. Pursuant to the 2024 Loeb Consulting Agreement, Mr. Loeb received cash compensation of $16,780 per month for service as President and CEO of Acorn, and an additional $10,000 per month for serving as Acting CEO of OmniMetrix. Mr. Loeb also received a grant of options on January 2, 2024 to purchase 2,200 shares of the Company’s common stock, which are exercisable at an exercise price equal to the December 29, 2023, closing price of the common stock of $6.09 per share. Twenty-five percent (25%) of the options were vested immediately; the remaining options vested in three equal increments on April 1, 2024, July 1, 2024 and October 1, 2024. The exercise period and other terms are otherwise substantially the same as the terms of the options granted by the Company to its outside directors. The 2024 Consulting Agreement expired on December 31, 2024.
Tracy S. Clifford. On January 1, 2025, the 2024 Clifford Consulting Agreement discussed below for the provision of Ms. Clifford’s services as both CFO of Acorn and COO of OmniMetrix automatically renewed for another one-year term. Pursuant to the 2024 Clifford Consulting Agreement, Ms. Clifford received cash compensation of $18,025 per month. Ms. Clifford also received a grant of options on January 1, 2025 to purchase 2,200 shares of the Company’s common stock, which are exercisable at an exercise price equal to the December 31, 2024, closing price of the common stock of $17.89 per share. Twenty-five percent (25%) of the options were vested immediately; the remaining options vested in three equal increments on April 1, 2025, July 1, 2025 and October 1, 2025. The exercise period and other terms are otherwise substantially the same as the terms of the options granted by the Company to its outside directors. The Company and Ms. Clifford entered into a new consulting agreement for 2026 as described below under Employment Arrangements.
On January 2, 2024, the Company entered into an Amended and Restated Consulting Agreement with Ms. Clifford (the “2024 Clifford Consulting Agreement”) for the provision of Ms. Clifford’s services as both CFO of Acorn and COO of OmniMetrix. The 2024 Clifford Consulting Agreement amended, restated and replaced in its entirety the 2023 Clifford Consulting Agreement. The 2024 Clifford Consulting Agreement had an effective date of January 1, 2024, had an initial one-year term, and was to automatically renew for an additional year upon the expiration of each one-year term unless earlier terminated as provided therein. Pursuant to the 2024 Clifford Consulting Agreement, Ms. Clifford received cash compensation of $18,025 per month. In the event of termination, other than for cause, Ms. Clifford was to be entitled to continuation, for a period of six months following the date of such termination, of the monthly cash compensation in effect at the time of such termination. Pursuant to the terms of the 2024 Clifford Consulting Agreement, Ms. Clifford also received a grant of options on January 2, 2024, to purchase 2,200 shares of the Company’s common stock, which are exercisable at an exercise price equal to the December 29, 2023, closing price of the common stock of $6.09 per share. Twenty-five percent (25%) of the options were vested immediately; the remaining options vested in three equal increments on April 1, 2024, July 1, 2024 and October 1, 2024. On each subsequent anniversary of January 1, 2024, so long as the 2024 Clifford Consulting Agreement has not been terminated, the Company was to grant Ms. Clifford 2,200 stock options exercisable at an exercise price equal to the then-current stock price. Twenty-five percent (25%) of the options were to be vested immediately as of the date of grant; the remaining options were to vest in three equal increments on April 1, July 1 and October 1 during the first nine months following the date of grant. The exercise period and other terms were to be otherwise substantially the same as the terms of the options granted by the Company to its outside directors. This agreement auto renewed on January 1, 2025 as described above.
Stockholder input on executive compensation. Stockholders can provide the Company with their views on executive compensation matters at each year’s annual meeting through the stockholder advisory vote on executive compensation and during the interval between stockholder advisory votes. The Company welcomes stockholder input on our executive compensation matters, and stockholders are able to reach out directly to our independent directors by emailing samzentman@yahoo.com to express their views on executive compensation matters.
Employment Arrangements
The employment arrangements of each named executive officer are described below.
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Jan H. Loeb
On January 19, 2026, the Company entered into a new consulting agreement (the “2026 Loeb Consulting Agreement”) between Mr. Loeb and the Company extending its arrangements for compensation of Mr. Loeb for his services as President and CEO of Acorn and as principal executive officer of OmniMetrix in the capacity of Acting CEO. In such capacities, Mr. Loeb acts as a consultant to, and not an employee of, the Company. Pursuant to the 2026 Loeb Consulting Agreement, Mr. Loeb will receive annualized cash compensation of $207,400 for service as President and CEO of Acorn, and an additional $10,300 per month for so long as he serves as Acting CEO of OmniMetrix. Mr. Loeb also received a grant of options on January 19, 2026 to purchase 25,000 shares of the Company’s common stock, which shall be exercisable at an exercise price equal to the January 16, 2026, closing price of the common stock of $19.02 per share. One-twelfth of the options are immediately vested and exercisable; the remaining options will vest and become exercisable in eleven equal quarterly increments beginning on April 1, 2026, unless such vesting is accelerated in connection with a change of control of the Company. The exercise period and other terms are otherwise substantially the same as the terms of the options granted by the Company to its outside directors. The 2026 Loeb Consulting Agreement expires on December 31, 2026, unless terminated early as provided therein.
Tracy S. Clifford
On January 19, 2026, the Company entered into an Amended and Restated Consulting Agreement with Tracy Clifford Consulting, LLC, for the provision of Ms. Clifford’s services to the Company as both CFO of Acorn and COO of OmniMetrix (the “2026 Clifford Consulting Agreement”). In such capacity, Ms. Clifford acts as a consultant to, and not an employee of, the Company. The 2026 Clifford Consulting Agreement amends, restates and replaces in its entirety the 2024 Clifford Consulting Agreement. The 2026 Clifford Consulting Agreement has an effective date of January 1, 2026, has a one-year term, and automatically renews for an additional year upon the expiration of each one-year term unless earlier terminated as provided therein. Pursuant to the 2026 Clifford Consulting Agreement, Ms. Clifford receives annualized cash compensation of $222,789. In the event of termination by the Company other than for cause, Ms. Clifford shall be entitled to a continuation, for a period of six months following the date of such termination by the Company, of the monthly cash compensation in effect at the time of such termination by the Company. Pursuant to the terms of the 2026 Clifford Consulting Agreement, Ms. Clifford also received a grant of options on January 19, 2026, to purchase 25,000 shares of the Company’s common stock, which shall be exercisable at an exercise price equal to the January 16, 2026, closing price of the common stock of $19.02 per share. One-twelfth of the options were immediately vested and exercisable; the remaining options will vest and become exercisable in eleven equal quarterly increments beginning on April 1, 2026, unless such vesting is accelerated in connection with a change of control of the Company. On each subsequent anniversary of January 1, 2026, so long as the 2026 Clifford Consulting Agreement has not been terminated, the Company will grant Ms. Clifford 25,000 stock options exercisable at an exercise price equal to the then-current stock price. One-twelfth of such options will be vested immediately as of the date of the respective grant; the remaining options will vest in eleven equal quarterly increments beginning on April 1 of the year of the respective grant, unless such vesting is accelerated in connection with a change of control of the Company. The exercise period and other terms are otherwise substantially the same as the terms of the options granted by the Company to its outside directors.
Outstanding Equity Awards at 2025 Fiscal Year End
The following table sets forth all outstanding equity awards made to each of the Named Executive Officers that were outstanding at December 31, 2025.
| OPTIONS TO PURCHASE ACORN ENERGY, INC. STOCK | ||||||||||||||
| Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | ||||||||||
| Jan H. Loeb | 2,187 | — | 5.92 | January 1, 2027 | ||||||||||
| 2,187 | — | 7.68 | January 1, 2028 | |||||||||||
| 2,187 | — | 10.08 | January 1, 2029 | |||||||||||
| 2,187 | — | 5.60 | January 1, 2030 | |||||||||||
| 2,200 | — | 6.09 | January 2, 2031 | |||||||||||
| 2,200 | — | 17.50 | January 1, 2032 | |||||||||||
| Tracy S. Clifford | 1,875 | — | 4.48 | June 25, 2026 | ||||||||||
| 3,125 | — | 3.68 | June 8, 2027 | |||||||||||
| 6,250 | — | 9.92 | May 10, 2028 | |||||||||||
| 3,125 | — | 7.04 | June 1, 2029 | |||||||||||
| 6,250 | — | 4.96 | June 1, 2030 | |||||||||||
| 2,200 | 6.09 | January 2, 2031 | ||||||||||||
| 2,200 | — | 17.89 | January 1, 2032 | |||||||||||
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Option and Warrant Exercises
Options were exercised by Tracy Clifford on May 9, 2025, for 1,875 shares at an exercise price of $6.56 per share.
Non-qualified Deferred Compensation
There was no executive non-qualified deferred compensation activity for either of our named executive officers for the year ended December 31, 2025.
Payments and Benefits Upon Termination or Change in Control
Jan H. Loeb
Under the terms of the 2026 Loeb Consulting Agreement, there are no amounts due under any termination scenario.
The vesting of the 25,000 stock options granted on January 19, 2026 under the 2026 Loeb Consulting Agreement would have their vesting accelerated and become fully exercisable immediately prior to the first occurrence of any of the following: (1) the acquisition by any entity or natural person, or a group of entities and/or natural persons acting together, of a majority of the equity interests of the Company, OMX Holdings, Inc. or OmniMetrix, whether through purchase, merger, stock swap, or any similar deal structure; and (2) the sale or other disposition of all or substantially all the assets of the Company, OMX Holdings, Inc. or OmniMetrix.
Tracy S. Clifford
Under the terms of the 2026 Clifford Consulting Agreement, in the event of termination by the Company other than for cause, Ms. Clifford shall be entitled to a continuation, for a period of six months following the date of such termination, of the monthly cash compensation in effect at the time of such termination.
The vesting of the 25,000 stock options granted on January 19, 2026 under the 2026 Clifford Consulting Agreement would have their vesting accelerated and become fully exercisable immediately prior to the first occurrence of any of the following: (1) the acquisition by any entity or natural person, or a group of entities and/or natural persons acting together, of a majority of the equity interests of the Company, OMX Holdings, Inc. or OmniMetrix, whether through purchase, merger, stock swap, or any similar deal structure; and (2) the sale or other disposition of all or substantially all the assets of the Company, OMX Holdings, Inc. or OmniMetrix.
On March 25, 2025, the Company entered into a Change in Control Bonus Agreement with Ms. Clifford. Pursuant to the agreement, if (1) the Company were to consummate a Change in Control (as defined in the agreement) during the period of time beginning on the Effective Date and ending eighteen (18) months thereafter (provided that such period would be extended up to an additional six (6) months if during the aforementioned eighteen (18) month-period the Company were to enter into a definitive agreement or legally binding term sheet for a transaction which would result in a Change in Control), and (2) Ms. Clifford has remained in continuous service as Chief Operating Officer of, or in a similar executive capacity at, OmniMetrix from the Effective Date through consummation of the Change in Control, then the Company would pay her, contemporaneous with the consummation of the Change in Control, a lump-sum cash bonus payment equal to $100,000 multiplied by the number of years (including partial years, for which an appropriate fraction will be added to the number of whole years) in the period commencing December 1, 2019, and ending upon the earlier of (A) consummation of the Change in Control, (B) the date of involuntary termination of her service other than for cause or due to death or disability, or (C) the date of voluntary termination of her service (provided, however, that in the event of voluntary termination of service by Ms. Clifford for any reason prior to a Change in Control, she would be entitled to a payment equal to seventy percent (70%) of the bonus upon the occurrence of a Change in Control within the Change in Control period, payable contemporaneous with the consummation of the Change in Control).
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Compensation of Directors in 2025
The Board reviews non-employee director compensation on an annual basis. Our compensation policy for non-employee Directors for 2025 was as follows:
Each non-employee Director (other than the Executive Chairman) received an annual retainer of $15,000, plus an annual grant on January 1 of an option to purchase 625 shares of Company Common Stock.
Upon a non-employee Director’s first election or appointment to the Board, such newly elected/appointed Director will be granted an option to purchase 1,562 shares of Company Common Stock. Each option granted to a newly elected/appointed Director shall vest for the purchase of one-third of the shares purchasable under such option on each of the three anniversaries following the date of the first election or appointment.
All options granted to non-employee Directors shall have an exercise price equal to the closing price of the Company’s Common Stock on its then-current trading platform or exchange on the last trading day immediately preceding the date of grant, and shall, except as described in the preceding paragraph, vest in four quarterly installments beginning on the grant date. Once vested, such options shall be exercisable in whole or in part at all times until the earliest of (i) seven years from the date of grant or (ii) 18 months from the date such Director ceases to be a Director, officer, employee of, or consultant to, the Company.
The chair of the Audit Committee receives an additional annual retainer of $10,000; each Audit Committee member other than the chair receives an additional annual retainer of $2,000.
Each Director may, in his discretion, elect by written notice delivered on or before the first day of each calendar year whether to receive, in lieu of some or all of his retainer and board fees, that number of shares of Company Common Stock as shall have a value equal to the applicable retainer and board fees, based on the closing price of the Company’s Common Stock on its then-current trading platform or exchange on the last trading day immediately preceding the first day of the applicable year. Once made, the election shall be irrevocable for such election year and the shares subject to the election shall vest and be issued one-fourth upon the first day of the election year and one-fourth as of the first day of each of the second through fourth calendar quarters thereafter during the remainder of the election year. A newly-elected or appointed Director may, in his or her discretion, make such an election for the balance of the year in which he or she was elected/appointed by written notice delivered on or before the tenth day after his or her election/appointment to the Board, with the number of shares of Company Common Stock subject to such newly elected/appointed Director’s election to be based on closing price of the Company’s Common Stock on its then-current trading platform or exchange on the last trading day immediately preceding the day of such newly elected/appointed Director’s election/appointment.
The following table sets forth information concerning the compensation earned for service on our Board of Directors during the fiscal year ended December 31, 2025 by each individual who served as a director at any time during the fiscal year (other than Mr. Loeb who was not separately compensated for his Board service).
DIRECTOR COMPENSATION IN 2025
| Name | Fees Earned or Paid in Cash ($) | Option Awards ($)(1) | All Other Compensation ($) | Total ($) | ||||||||||||
| Samuel M. Zentman | 25,000 | (2) | 10,866 | (1) | — | 35,866 | ||||||||||
| Gary Mohr | 17,000 | (3) | 10,866 | (1) | — | 27,866 | ||||||||||
| Peter Rabover | 15,000 | (4) | 10,866 | (1) | 25,866 | |||||||||||
| Michael F. Osterer | 17,000 | (3) | 10,866 | (1) | — | 27,866 | ||||||||||
| (1) | On January 1, 2025, Samuel M. Zentman, Gary Mohr, Peter Rabover, and Michael F. Osterer were each granted 625 options to acquire stock in the Company. The options had an exercise price of $17.89 and were to expire on January 1, 2032. The fair value of the options was determined using the Black-Scholes option pricing model using the following assumptions: (i) a risk-free interest rate of 4.4% (ii) an expected term of 5.6 years (iii) an assumed volatility of 181.8% and (iv) no dividends. | |
| (2) | Represents the annual retainer of $15,000 as a non-employee director and $10,000 received for services rendered as Chairman of the Audit Committee. | |
| (3) | Represents the annual retainer of $15,000 as a non-employee director plus $2,000 received for services rendered as a member of the Audit Committee. | |
| (4) | Represents the annual retainer of $15,000 as a non-employee director. |
| 27 |
Director Compensation Change for 2026
On January 19, 2026, the Company amended its compensation policy for non-employee Directors. On January 1, each non-employee Director will receive an annual grant of options to purchase 3,125 shares of our common stock, with such options to vest and become exercisable in four quarterly increments beginning on the grant date. Upon a non-employee Director’s first election or appointment to the Board, such newly elected/appointed Director will be granted an option to purchase 3,125 shares of Company Common Stock. The other elements of our compensation policy for non-employee Directors remain unchanged from 2025.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
OWNERSHIP OF THE COMPANY’S COMMON STOCK
The following table and the notes thereto set forth information, as of March 3, 2026, concerning beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange Act of 1934) of common stock by (i) each director of the Company, (ii) each executive officer (iii) all executive officers and directors as a group, and (iv) each holder of 5% or more of the Company’s outstanding shares of common stock.
| Name and Address of Beneficial Owner (1) (2) | Number of Shares of Common Stock Beneficially Owned (2) | Percentage of Common Stock Outstanding (2) | ||||||
| Jan H. Loeb | 532,763 | (3) | 21.11 | % | ||||
| Gary Mohr | 75,737 | (4) | 3.02 | % | ||||
| Michael F. Osterer | 183,933 | (5) | 7.32 | % | ||||
| Peter Rabover | 127,592 | (6) | 5.08 | % | ||||
| Samuel M. Zentman | 12,554 | (7) | * | |||||
| Tracy S. Clifford | 32,191 | (8) | 1.27 | % | ||||
| All executive officers and directors of the Company as a group (6 people) | 912,687 | (9) | 35.46 | % | ||||
| Joel Charles Sklar | 162,111 | (10) | 6.47 | % | ||||
* Less than 1%
| (1) | Unless otherwise indicated, the address for each of the beneficial owners listed in the table is in care of the Company, 1000 N West Street, Suite 1200, Wilmington, Delaware 19801. |
| (2) | Unless otherwise indicated, each person has sole investment and voting power with respect to the shares indicated. For purposes of this table, a person or group of persons is deemed to have “beneficial ownership” of any shares, as of a given date which such person has the right to acquire within 60 days after such date. Percentage information is based on the 2,506,501 shares outstanding as of March 3, 2026 . |
| (3) | Consists of 242,198 shares held by Mr. Loeb directly, 273,251 shares held by Leap Tide Capital Acorn LLC, and 17,314 shares underlying currently exercisable options held by Mr. Loeb. Mr. Loeb is the sole manager of Leap Tide Capital Acorn LLC, with sole voting and dispositive power over the securities held by such entity. Mr. Loeb disclaims beneficial ownership of the securities held by Leap Tide Capital Acorn LLC except to the extent of his pecuniary interest therein. |
| (4) | Consists of 70,425 shares beneficially held by Mr. Mohr (including 52,083 shares held by UE Systems Inc.), and 5,312 shares underlying currently exercisable options. |
| (5) | Consists of 178,294 shares beneficially held by Mr. Osterer (including 52,083 shares held by UE Systems Inc.), and 5,639 shares underlying currently exercisable options. |
| 28 |
| (6) | Consists of 123,218 shares held by Artko Capital LP and 4,374 shares underlying currently exercisable options held by Mr. Rabover. Mr. Rabover is Managing Director of Artko Capital LP, with sole voting and dispositive power over the securities held by such entity. Mr. Rabover disclaims beneficial ownership of the securities held by Artko Capital LP except to the extent of his pecuniary interest therein. |
| (7) | Consists of 7,242 shares and 5,312 shares underlying currently exercisable options. |
| (8) | Consists of 3,000 shares and 29,191 shares underlying currently exercisable options. |
| (9) | Consists of 845,545 shares and 67,142 shares underlying currently exercisable options. |
| (10) | The information is based on a Schedule 13G filed by Mr. Sklar with the SEC on October 18, 2024, reporting beneficial ownership as of that date. Mr. Sklar reported that he has sole voting power and sole dispositive power with respect to all 162,111 shares of Common Stock. |
EQUITY COMPENSATION PLAN INFORMATION
The table below provides certain information concerning our equity compensation plans as of December 31, 2025.
| Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (a) | Weighted-average Exercise Price of Outstanding Options, Warrants and Rights | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) | |||||||||
| Equity Compensation Plans Approved by Security Holders | 327 | $ | 3.77 | — | ||||||||
| Equity Compensation Plans Not Approved by Security Holders | 54,110 | $ | 7.99 | 63,235 | ||||||||
| Total | 54,437 | $ | 7.96 | 63,235 | ||||||||
The grants made under our equity compensation plans not approved by security holders represent 54,110 options which were granted under our 2006 Stock Incentive Plan following the original expiration of the Plan on February 8, 2017. These grants were made to directors and officers at exercise prices equal to the fair market value on the date of the grant. The options generally vest over a one-year period and expire seven years from the date of the grant. In February 2019, the Company’s Board ratified all option grants made under our 2006 Stock Incentive Plan following the original expiration of the Plan on February 8, 2017 and extended the expiration date of the Amended and Restated 2006 Stock Incentive Plan until December 31, 2024. In March 2025, the Company’s Board ratified all option grants made under our Amended and Restated 2006 Stock Incentive Plan following expiration of the Plan on December 31, 2024 and extended the expiration date of the Amended and Restated 2006 Stock Incentive Plan until December 31, 2034.
Equity awards are granted to our named executive officers pursuant to the terms of their consulting agreements. The 2025 Loeb Consulting Agreement provided for, on the date the agreement was executed, a grant to Mr. Loeb of 2,200 stock options exercisable at an exercise price equal to the then-current stock price. The 2024 Clifford Consulting Agreement called for, on each anniversary of January 1, 2024, so long as the 2024 Clifford Consulting Agreement had not been terminated, a grant to Ms. Clifford of 2,200 stock options exercisable at an exercise price equal to the then-current stock price (such a grant was made on January 1, 2025). The 2026 Loeb Consulting Agreement and the 2026 Clifford Consulting Agreement each provided for, on the date the respective agreement was executed, a grant of 25,000 stock options, respectively, to Mr. Loeb and Ms. Clifford, exercisable at an exercise price equal to the then-current stock price (and the 2026 Clifford Consulting Agreement provides for additional grants to Ms. Clifford of 25,000 stock options on each anniversary of January 1, 2026, so long as the agreement has not been terminated). Our director compensation policy currently calls for an annual grant of stock options to our directors on the first day of the applicable fiscal year. In addition, equity awards may be granted at other times during the year to new hires, employees receiving promotions, and in other special circumstances.
We do not grant equity awards in anticipation of the release of material, nonpublic information or time the release of material, nonpublic information based on equity award grant dates, vesting events, or sale events. For all stock option awards, the exercise price is the closing price of our common stock on the NASDAQ marketplace on the last trading day preceding the date of grant.
| 29 |
ITEM 13. CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
Director Independence
Applying the definition of independence provided under the NASDAQ rules, the Board has determined that with the exception of Jan H. Loeb, all of the members of the Board of Directors are independent. The Board has also determined that all of the members of the Audit Committee, the Compensation Committee and the Nominating Committee are independent under the NASDAQ independence standards for such committees.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Accounting Fees
The following table summarizes the fees billed to Acorn for professional services rendered by CBIZ CPAs P.C and Marcum, LLP for the years ended December 31, 2025 and 2024, respectively.
| 2025 | 2024 | |||||||
| Audit fees | $ | 161,700 | $ | 144,835 | ||||
| Tax fees(a) | 551 | 23,107 | ||||||
| All other fees | — | — | ||||||
| Total | $ | 162,251 | $ | 168,772 | ||||
| (a) | Tax services for the year ended December 31, 2025, was provided by CBIZ, Inc. |
Audit Fees were for professional services rendered for the audits of the consolidated financial statements of the Company, assistance with review of documents filed with the SEC, consents, and other assistance required to be performed by our independent accountants.
Tax Fees generally consist of tax compliance fees.
Pre-Approval Policies and Procedures
The Audit Committee’s current policy is to pre-approve all audit and non-audit services that are to be performed and fees to be charged by our independent auditor to assure that the provision of these services does not impair the independence of the auditor. The Audit Committee pre-approved all audit and non-audit services rendered by our principal accountant in 2025 and 2024.
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a)(1) List of Financial Statements of the Registrant
The consolidated financial statements of the Registrant and the reports thereon of the Registrant’s Independent Registered Public Accounting Firms are included in this Annual Report beginning on page F-1.
| 30 |
ITEM 16. FORM 10-K SUMMARY
Not applicable.
(a)(3) List of Exhibits
| 31 |
| 32 |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Wilmington, State of Delaware, on March 5, 2026.
| ACORN ENERGY, INC. | ||
| By: | /s/ Jan H. Loeb | |
| Jan H. Loeb | ||
| President and Chief Executive Officer | ||
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant, in the capacities and on the dates indicated.
| Signature | Title | Date | ||
| /s/ Jan H. Loeb | President, Chief Executive Officer and | March 5, 2026 | ||
| Jan H. Loeb | Director (Principal Executive Officer) | |||
| /s/ Tracy S. Clifford | Chief Financial Officer (Principal Financial | March 5, 2026 | ||
| Tracy S. Clifford | Officer and Principal Accounting Officer) | |||
| /s/ Gary Mohr | Director | March 5, 2026 | ||
| Gary Mohr | ||||
| /s/ Michael F. Osterer | Director | March 5, 2026 | ||
| Michael F. Osterer | ||||
| /s/ Peter Rabover | Director | March 5, 2026 | ||
| Peter Rabover | ||||
| /s/ Samuel M. Zentman | Director | March 5, 2026 | ||
| Samuel M. Zentman |
| 33 |
ACORN ENERGY, INC. AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
| F-1 |
Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors of
Acorn Energy, Inc.
Opinion on the Financial Statements
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
Critical Audit Matters
Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.
/s/ CBIZ CPAs P.C.
We have served as the Company’s auditor since 2010 (such date takes into account the acquisition of the attest business of Marcum LLP by CBIZ CPAs P.C. effective November 1, 2024).
March 5, 2026
| F-2 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and Board of Directors of
Acorn Energy, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheet of Acorn Energy, Inc. (the “Company”) as of December 31, 2024, the related consolidated statements of operations, changes in equity (deficit), and cash flows for the year ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the year ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
| /s/ Marcum llp |
We have served as the Company’s auditor from 2010-2025.
March 6, 2025
| F-3 |
ACORN ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
| 2025 | 2024 | |||||||
| As of December 31, | ||||||||
| 2025 | 2024 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable, net | ||||||||
| Inventory, net | ||||||||
| Other current assets | ||||||||
| State income tax receivable | ||||||||
| Deferred cost of goods sold (COGS) | ||||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Right-of-use assets, net | ||||||||
| Deferred COGS | ||||||||
| Other assets | ||||||||
| Deferred tax assets | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND EQUITY (DEFICIT) | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses | ||||||||
| Deferred revenue | ||||||||
| Current operating lease liabilities | ||||||||
| Other current liabilities | ||||||||
| State income tax payable | ||||||||
| Total current liabilities | ||||||||
| Long-term liabilities: | ||||||||
| Deferred revenue | ||||||||
| Noncurrent operating lease liabilities | ||||||||
| Other long-term liabilities | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (Note 8) | ||||||||
| Equity (deficit): Acorn Energy, Inc. stockholders | ||||||||
| Common stock – $ par value per share; Authorized – shares; issued – and shares at December 31, 2025 and 2024, respectively; outstanding – and at December 31, 2025 and 2024, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated stockholders’ deficit | ( | ) | ( | ) | ||||
| Treasury stock, at cost – shares at December 31, 2025; shares at December 31, 2024 | ( | ) | ( | ) | ||||
| Total Acorn Energy, Inc. stockholders’ equity | ||||||||
| Non-controlling interests | ||||||||
| Total equity | ||||||||
| Total liabilities and equity | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-4 |
ACORN ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
| 2025 | 2024 | |||||||
| Year ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Revenue | $ | $ | ||||||
| COGS | ||||||||
| Gross profit | ||||||||
| Operating expenses: | ||||||||
| Research and development expense (R&D) | ||||||||
| Selling, general and administrative (SG&A) expense | ||||||||
| Total operating expenses | ||||||||
| Operating income | ||||||||
| Interest income, net | ||||||||
| Income before income taxes | ||||||||
| Current state tax expense | ( | ) | ( | ) | ||||
| Deferred income tax benefit | ||||||||
| Net income | ||||||||
| Non-controlling interest share of income | ( | ) | ( | ) | ||||
| Net income attributable to Acorn Energy, Inc. stockholders. | $ | $ | ||||||
| Basic and diluted net income per share attributable to Acorn Energy, Inc. stockholders: | ||||||||
| Net income per share attributable to Acorn Energy, Inc. stockholders – basic | $ | $ | ||||||
| Net income per share attributable to Acorn Energy, Inc. stockholders –diluted | $ | $ | ||||||
| Weighted average number of shares outstanding attributable to Acorn Energy, Inc. stockholders – basic | ||||||||
| Weighted average number of shares outstanding attributable to Acorn Energy, Inc. stockholders – diluted | ||||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-5 |
ACORN ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (DEFICIT)
(IN THOUSANDS)
| Number of Shares Outstanding | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Number
of Treasury Shares | Treasury Stock | Energy,
Inc. | Non- controlling interests | Total Equity (Deficit) | ||||||||||||||||||||||||||||
| Acorn Energy, Inc. Stockholders | Total Acorn | |||||||||||||||||||||||||||||||||||
| Number of Shares Outstanding | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Number
of Treasury Shares | Treasury Stock | Energy, Inc. | Non- controlling interests | Total Equity (Deficit) | ||||||||||||||||||||||||||||
| Balances as of December 31, 2023 | $ | | $ | $ | ( | ) | | $ | ( | ) | $ | ( | ) | $ | | $ | ( | ) | ||||||||||||||||||
| Net income | — | — | ||||||||||||||||||||||||||||||||||
| Proceeds from stock option exercises | * | — | ||||||||||||||||||||||||||||||||||
| Accrued dividend in OmniMetrix preferred shares | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | ||||||||||||||||||||||||||||||||||
| Balances as of December 31, 2024 | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Balances | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Net income | — | — | ||||||||||||||||||||||||||||||||||
| Shares repurchased and held in Treasury | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Proceeds from stock option exercises | * | — | ||||||||||||||||||||||||||||||||||
| Accrued dividend in OmniMetrix preferred shares | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | ||||||||||||||||||||||||||||||||||
| Balances as of December 31, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | $ | |||||||||||||||||||||||||
| Balances | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | $ | |||||||||||||||||||||||||
| * |
The accompanying notes are an integral part of these consolidated financial statements.
| F-6 |
ACORN ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
| 2025 | 2024 | |||||||
| Year ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Cash flows provided by operating activities: | ||||||||
| Net income | $ | $ | ||||||
| Depreciation and amortization | ||||||||
| Increase (decrease) in the provision for credit losses | ( | ) | ||||||
| Impairment of inventory | ||||||||
| Non-cash lease expense | ||||||||
| Deferred income tax benefit | ( | ) | ( | ) | ||||
| Stock-based compensation | ||||||||
| Change in operating assets and liabilities: | ||||||||
| Decrease (increase) in accounts receivable | ( | ) | ||||||
| (Increase) decrease in inventory | ( | ) | ||||||
| Decrease in deferred COGS | ||||||||
| Decrease in other current assets and other assets | ||||||||
| Increase in state income tax receivable | ( | ) | ( | ) | ||||
| Decrease in deferred revenue | ( | ) | ( | ) | ||||
| Decrease in operating lease liability | ( | ) | ( | ) | ||||
| (Decrease) increase in state income tax payable | ( | ) | ||||||
| (Decrease) increase in accounts payable, accrued expenses, other current liabilities and non-current liabilities | ( | ) | ||||||
| Net cash provided by operating activities | ||||||||
| Cash flows used in investing activities: | ||||||||
| Investments in technology | ( | ) | ( | ) | ||||
| Leasehold improvements | ( | ) | ||||||
| Patents | ( | ) | ||||||
| Equipment purchases | ( | ) | ( | ) | ||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash flows provided by financing activities: | ||||||||
| Stock repurchases held in Treasury | ( | ) | ||||||
| Stock option exercise proceeds | ||||||||
| Net cash provided by financing activities | ||||||||
| Net increase in cash | ||||||||
| Cash at the beginning of the year | ||||||||
| Cash at the end of the year | $ | $ | ||||||
| Supplemental cash flow information: | ||||||||
| Cash paid during the year for: | ||||||||
| Interest | $ | $ | ||||||
| Income taxes | $ | $ | ||||||
| Louisiana | $ | $ | ||||||
| North Carolina | $ | $ | ||||||
| New Jersey | $ | $ | ||||||
| Pennsylvania | $ | $ | ||||||
| Tennessee | $ | $ | ||||||
| Other | $ | $ | ||||||
| Non-cash investing and financing activities: | ||||||||
| Right-of-use assets | $ | $ | ||||||
| Operating lease liability | $ | $ | ||||||
| Accrued preferred dividends to former CEO of OmniMetrix (see Note 3) | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-7 |
ACORN ENERGY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
NOTE 1—NATURE OF OPERATIONS
(a) Description of Business
Acorn Energy, Inc. and its subsidiaries, OMX Holdings, Inc. and OmniMetrix, LLC (collectively, “Acorn” or “the Company”) is a Delaware corporation which is a holding company focused on technology-driven solutions for energy infrastructure asset management. The Company provides the following products and Internet of Things (“IoT”) applications and services through its OmniMetrix, LLC (“OmniMetrix”) subsidiary:
Power Generation (“PG”). OmniMetrix’s PG services provide wireless remote monitoring and control systems and IoT applications for commercial/industrial and residential power generation equipment. In 2025, the Company launched the Omni family of products—the OmniPro commercial monitor and the Omni residential monitor—built on a new proprietary common communications core called the OCOM, a platform designed to enhance connectivity, reliability, and performance in remote monitoring systems. These products are replacing the Company’s legacy TrueGuard product lines, offering enhanced flexibility, expandability, and improved connectivity with easier installation. OmniMetrix also offers the Smart Annunciator product for commercial customers who require a visual representation of generator status via a touchscreen display.
Cathodic Protection (“CP”). OmniMetrix’s CP services provide remote monitoring and control products for cathodic protection systems on gas pipelines serving the gas utilities market and pipeline operators. The CP product lineup includes solutions to remotely monitor and control rectifiers, test stations and bonds. In 2025, the Company launched the RADex, an OCOM-based expansion of our RAD™ (Remote AC Mitigation Disconnect) that adds cathodic protection measurements while retaining the ability to remotely disconnect/connect AC mitigation tools on solid-state decouplers, reducing expense and increasing employee safety.
See Notes 12 and 13 for segment information and major customers.
Acorn’s shares are traded on NASDAQ under the symbol ACFN.
(b) Liquidity
As
of December 31, 2025, the Company had $
At
December 31, 2025, the Company had working capital of $
As
of March 3, 2026, the Company had cash of $
| F-8 |
NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). All dollar amounts are rounded to the nearest thousand and, thus, are approximate.
Principles of Consolidation and Presentation
The consolidated financial statements include the accounts of Acorn Energy, Inc. (“Acorn”) and its subsidiaries, OmniMetrix, LLC (“OmniMetrix”) and OMX Holdings, Inc. (collectively, with Acorn and OmniMetrix, “the Company”). Intercompany transactions and balances are eliminated in consolidation; profits from intercompany sales are also eliminated; and non-controlling interests are included in equity.
Use of Estimates in Preparation of Financial Statements
The preparation of consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods.
As applicable to these consolidated financial statements, the most significant estimates and assumptions relate to uncertainties with respect to valuation allowance.
Accounts Receivable and Credit Losses
Accounts receivable consists of trade receivables. Trade receivables are recorded at the invoiced amount, net of any allowance for credit losses.
The Company’s trade receivables primarily arise from the sale of our products to a national telecommunications company, independent residential dealers, industrial distributors and dealers, national and regional retailers, equipment distributors, and certain end users with payment terms generally ranging from 30 to 60 days. Certain very large commercial customers have 90-day terms. The Company evaluates the credit risk of a customer when extending credit based on a combination of various financial and qualitative factors that may affect the customer’s ability to pay. These factors include the customer’s financial condition and past payment experience.
The Company maintains an allowance for credit losses, which represents an estimate of expected losses over the remaining contractual life of its receivables considering current market conditions and estimates for supportable forecasts when appropriate. The Company measures expected credit losses on its trade receivables on an entity-by-entity basis. The estimate of expected credit losses considers a historical loss experience rate that is adjusted for delinquency trends, collection experience, and/or economic risk where appropriate. Additionally, management develops a specific allowance for trade receivables known to have a high risk of expected future credit loss.
For the Company, contract assets are subject to review under ASC 326 however, no credit losses on contract assets were incurred.
Inventory
Inventories are comprised of components (raw materials) and finished goods, which are measured at the lower cost or net realizable value.
Raw materials inventory is generally comprised of radios, cables, antennas, and electrical components. Finished goods inventory consists of fully assembled systems ready for final shipment to the customer. Costs are determined at cost of acquisition on a weighted average basis and include all outside production and applicable shipping costs.
All inventories are periodically reviewed to identify slow-moving and obsolete inventory. Management conducts an assessment at the end of each reporting period of the Company’s inventory reserve and writes off any inventory items that are deemed obsolete.
All
inventories are periodically reviewed to identify slow-moving and obsolete inventory. Management conducted an assessment and wrote-off
inventory valued at $
| F-9 |
Impairment of Long-Lived Assets
The Company reviews long-lived assets, such as property and equipment, intangible assets subject to amortization, and right-of-use assets on operating leases for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. These events or changes in circumstances include, but are not limited to, significant underperformance relative to historical or projected future operating results, significant changes in the manner of use of the acquired assets or the strategy for the overall business, and significant negative industry or economic trends. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the asset group to the estimated undiscounted cash flows over the estimated remaining useful life of the primary asset included in the asset group. If the asset group is not recoverable, the impairment loss is calculated as the excess of the carrying value over the fair value.
Non-Controlling Interests
The Financial Accounting Standards Board (“FASB”) requires that non-controlling interests be reported as a component of equity, changes in a parent’s ownership interest while the parent retains its controlling interest be accounted for as equity transactions, and upon a loss of control, retained ownership interest be re-measured at fair value, with any gain or loss recognized in earnings. The Company attributes the applicable percentage of income and losses to the non-controlling interests associated with OmniMetrix (see Note 3).
Property and Equipment
Property and equipment are presented at cost at the date of acquisition. Depreciation and amortization are calculated based on the straight-line method over the estimated useful lives of the depreciable assets, or in the case of leasehold improvements, the shorter of the lease term or the estimated useful life of the asset, a portion of which is allocated to cost of sales. Improvements are capitalized while repairs and maintenance are charged to operations as incurred.
Capitalization of Software
The
Company capitalizes certain implementation costs incurred in a hosting arrangement that is a service contract to develop or obtain internal-use
software. During the year ended December 31, 2024, the Company capitalized internal-use software costs totaling $
Deferred Sales Commissions
The Company pays its employees sales commissions for sales of hardware and for first sales of monitoring services (not for renewals). In accordance with Topic 606, Revenue from Contracts with Customers, of the FASB Accounting Standards Codification (ASC 606”), the Company capitalizes as a contract asset the sales commissions on these sales. Commissions earned from the sales of the new hardware products will be recognized when the product is shipped. Commissions earned from the sales of monitoring services continue to be deferred and amortized over the period of service. Contract assets associated with monitoring services are amortized over the expected monitoring life, including renewals.
Leases
The Company determines if a contractual arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, current operating lease liabilities, and noncurrent operating lease liabilities on the Company’s consolidated balance sheets. The Company evaluates and classifies leases as operating or finance leases for financial reporting purposes. The classification evaluation begins at the commencement date and the lease term used in the evaluation includes the non-cancellable period for which the Company has the right to use the underlying asset, together with renewal option periods when the exercise of the renewal option is reasonably certain and failure to exercise such option would result in an economic penalty. All of the Company’s real estate leases are classified as operating leases.
ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date of the lease based on the present value of the lease payments over the lease term. The lease payments included in the present value are fixed lease payments. As most of the Company’s leases do not provide an implicit rate, the Company estimates its collateralized incremental borrowing rate, based on information available at the commencement date, in determining the present value of lease payments. The Company applies the portfolio approach in applying discount rates to its classes of leases. The operating lease ROU assets include any payments made before the commencement date. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company does not currently have residual value guarantees or restrictive covenants in its leases.
| F-10 |
The Company also made accounting policy elections by class of underlying asset to not apply the recognition requirements of the standard to leases with terms of 12 months or less and to not separate non-lease components from lease components. Consequently, each separate lease component and the non-lease components associated with that lease component will be accounted for as a single lease component for lease classification, recognition, and measurement purposes.
The
lease obligation liability was $
Treasury Stock
Shares of common stock repurchased are recorded at cost as treasury stock. When shares are reissued, the cost method is used for determining cost. In accordance with GAAP, the excess of the acquisition cost over the reissuance price of the treasury stock, if any, is charged to additional paid-in capital, limited to the amount previously credited to additional paid-in capital, if any. Any excess is charged to accumulated stockholders’ deficit.
Segment Reporting
Operating segments are defined as components of an enterprise for which separate financial information is available and that is evaluated on a regular basis by the chief operating decision-maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s operations are organized into two reportable segments: PG and CP. See Note 1, Nature of Operations, for the description of each of these segments. The Company’s organizational structure is based on factors that the CODM uses to evaluate, view and run the business operations, which include, but are not limited to, the customer base, market share, competitive landscape and technology. The CODM uses several metrics to evaluate the performance of the overall business, including number of connections, revenue and profit margin and uses these results to allocate resources to each of the segments.
Revenue Recognition
The Company’s revenue recognition policy is consistent with applicable revenue recognition guidance and interpretations. The core principle of ASC 606 is to recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. ASC 606 defines a five-step process to achieve this core principle, which includes: (1) identifying contracts with customers, (2) identifying performance obligations within those contracts, (3) determining the transaction price, (4) allocating the transaction price to the performance obligation in the contract, which may include an estimate of variable consideration, and (5) recognizing revenue when or as each performance obligation is satisfied. The Company assesses whether payment terms are customary or extended in accordance with normal practice relative to the market in which the sale is occurring. The Company’s sales arrangements generally include standard payment terms. These terms effectively relate to all customers, products, and arrangements regardless of customer type, product mix or arrangement size. See Note 13, Revenue, for further discussion.
Revenue from sales of the hardware products that are distinct products are recorded when shipped (with the exception of the hardware products under a material contract with one customer for which revenue is recognized when the unit is accepted) while the revenue from sales of the hardware products (product versions sold prior to September 1, 2023) that were not separable from the Company’s monitoring services was deferred and amortized over the estimated unit life. Product revenues are recognized at the point in time when control of the product is transferred to the customer, which typically occurs upon shipment or delivery to the one customer under a material contract. To determine when control has transferred, the Company considers if there is a present right to payment and if legal title, physical possession, and the significant risks and rewards of ownership of the asset has transferred to the customer. Revenue from the prepayment of monitoring fees (generally paid twelve months in advance) are recorded as deferred revenue upon receipt of payment from the customer and then amortized to revenue over the monitoring service period. This method provides a faithful depiction of the transfer of services as it aligns the recognition of revenue with the period in which the monitoring services are provided. By deferring the revenue and recognizing it over the service period, the financial statements accurately reflect the company’s performance and obligations to its customers. See Notes 12 and 13 for the disaggregation of the Company’s revenue for the periods presented.
Any sales tax, value added tax, and other tax the Company collects concurrent with revenue producing activities are excluded from revenue.
| F-11 |
Warranty Provision
OmniMetrix generally grants their customers a one-year warranty on their products; however, large volume contracts may receive a longer-term warranty. Estimated warranty obligations are provided for as a cost of sales in the period in which the related revenues are recognized, based on management’s estimate of future potential warranty obligations and historical experience. Adjustments are made to accruals as warranty claim data and historical experience warrant. The Company’s warranty obligations may be materially affected by product or service failure rates and other costs incurred in correcting a product or service failure. Should actual product or service failure rates or other related costs differ from the Company’s estimates, revisions to the accrued warranty liability would be required.
Concentration of Credit Risk
The
Company’s financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of
cash and trade accounts receivable. The Company’s cash was deposited with a U.S. bank and amounted to $
Financial Instruments
Fair values of financial instruments included in current assets and current liabilities are estimated to approximate their book values, due to the short maturity of such instruments.
Research and Development Expenses
Research and development expenses consist primarily of labor and related expenses and are charged to operations as incurred.
Advertising Expenses
Advertising
expenses are charged to operations as incurred. Advertising expense was $
Stock-Based Compensation
The Company accounts for stock-based awards to employees in accordance with applicable accounting principles, which requires compensation expense related to share-based transactions, including employee stock options, to be measured and recognized in the consolidated financial statements based on a determination of the fair value of the stock options. The grant date fair value is determined using the Black-Scholes-Merton (“Black-Scholes”) pricing model. For all employee stock options, the Company recognizes expense over the requisite service period on an accelerated basis over the employee’s requisite service period (generally the vesting period of the equity grant). Stock-based compensation expense is included in selling, general and administrative expenses. The Company’s option pricing model requires the input of assumptions, including the expected stock price volatility, expected term, and forfeiture rate. Any changes in these highly subjective assumptions significantly impact stock-based compensation expense.
Options awarded to purchase shares of common stock issued to non-employees in exchange for services are accounted for as variable awards in accordance with applicable accounting principles. Such options are valued using the Black-Scholes option pricing model when the services are performed.
See Note 9(a) for the assumptions used to calculate the fair value of stock-based employee compensation. Upon the exercise of options, it is the Company’s policy to issue new shares rather than utilizing treasury shares.
| F-12 |
Sales Taxes
The
Company accrues sales taxes based on determination of which of its products/services are subject to sales tax, and in which states and
jurisdictions the tax applies. Further, the Company must determine which of its customers are exempt from the Company charging sales
tax because the customer is a reseller or self-assesses and direct pays to states and other jurisdictions on purchases the customer makes
from the Company. These determinations contain estimates and are subject to judgment and interpretation by taxing authorities in various
states and other jurisdictions, which could result in recognizing materially different amounts in future periods. At December 31, 2025
and December 31, 2024, the amount of such accrual was $
Deferred Income Taxes
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, as well as operating loss, capital loss and tax credit carryforwards. Deferred tax assets and liabilities are classified as non-current. Valuation allowances are established against deferred tax assets if it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates or laws is recognized in operations in the period that includes the date of the enactment. See Note 10(d) for discussion around the impacts of the One Big Beautiful Bill of 2025.
As
of December 31, 2024, the Company recorded a reduction in the valuation allowance of $
Income Tax Uncertainties
The calculation of the Company’s tax liabilities involves dealing with uncertainties in the application of complex tax regulations. The Company recognizes liabilities for uncertain tax positions based on the two-step process prescribed by applicable accounting principles. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step requires the Company to estimate and measure the tax benefit as the largest amount that is more likely than not being realized upon ultimate settlement. It is inherently difficult and subjective to estimate such amounts, as this requires the Company to determine the probability of various possible outcomes. The Company reevaluates these uncertain tax positions on a quarterly basis. This evaluation is based on factors including, but not limited to, changes in facts or circumstances, changes in tax law, effectively settled issues under audit, and new audit activity. Such a change in recognition or measurement would result in the recognition of a tax benefit or an additional charge to the tax provision in the period. The Company recognizes interest and penalties as incurred in interest income, net in the consolidated statements of operations.
As
of December 31, 2025 and 2024,
During
the years ending December 31, 2025 and 2024, the Company had
The Company is subject to U.S. Federal and state income tax. As of December 31, 2025, the Company is no longer subject to examination by U.S. Federal taxing authorities for years before 2022, or for years before 2021 for state income taxes.
| F-13 |
Basic net income per share is computed by dividing the net income attributable to Acorn Energy, Inc. by the weighted average number of shares outstanding during the year, excluding treasury stock. Diluted net income per share is computed by dividing the net income by the weighted average number of shares outstanding plus the dilutive potential of common shares which would result from the exercise of stock options and warrants. The dilutive effects of stock options and warrants are excluded from the computation of diluted net income per share if doing so would be antidilutive.
The combined weighted average number of options and warrants that were excluded from the computation of diluted net income per share, as they had an antidilutive effect, was (which have a weighted average exercise price of $) and (which had a weighted average exercise price of $) for the years ending December 31, 2025 and 2024, respectively.
SCHEDULE OF EFFECT ON NET INCOME LOSS AND WEIGHTED AVERAGE NUMBER OF SHARES
| 2025 | 2024 | |||||||
| Year ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Net income attributable to common stockholders | $ | $ | ||||||
| Weighted average shares outstanding: | ||||||||
| Basic | ||||||||
| Add: Stock options | ||||||||
| Diluted | ||||||||
| Basic net income per share | $ | $ | ||||||
| Diluted net income per share | $ | $ | ||||||
Fair Value Measurement
The Company follows the provisions of the accounting standard which defines fair value, establishes a framework for measuring fair value and enhances fair value measurement disclosure. Under these provisions, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date.
The standard establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use on unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is described below:
Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.
Level 2: Observable prices that are based on inputs not quoted on active markets but corroborated by market data.
Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.
The carrying amounts for cash, accounts receivable, and accounts payable approximate their fair value because of their short-term maturity. The Company determined that the carrying amount of the lease liabilities approximate fair value since the applicable interest rate approximated fair value at the time the leases were entered into. While the Company believes the carrying value of the assets and liabilities are reasonable, considerable judgment is used to develop estimates of fair value; thus, the estimates are not necessarily indicative of the amounts that could be realized in a current market exchange.
| F-14 |
Recent Accounting Pronouncements
In July 2025, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2025-05, which introduces a practical expedient and an accounting policy election for estimating expected credit losses on current accounts receivable and contract assets arising from revenue transactions under ASC Topic 606. The practical expedient allows entities to assume that current conditions as of the reporting date remain unchanged over the remaining life of the asset, thereby eliminating the need to incorporate forecasts of future economic conditions. The accounting policy election, available to entities other than public business entities, permits consideration of post-balance sheet cash collections in estimating expected credit losses, provided the practical expedient is also elected.
Although the Company qualifies as a public business entity and is therefore not eligible for the accounting policy election, the Company has evaluated the practical expedient and determined that it does not expect a material impact on its consolidated financial statements upon adoption.
ASU 2025-05 is effective for interim and annual periods beginning after December 15, 2025, with early adoption permitted. The Company does not plan to early adopt and will implement the guidance beginning with its first quarter of fiscal 2026.
In November 2024, the FASB issued Accounting Standards Update No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), and in January 2025, the FASB issued Accounting Standards Update No. 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date (“ASU 2025-01”). ASU 2024-03 requires additional disclosure of the nature of expenses included in the income statement as well as disclosures about specific types of expenses included in the expense captions presented in the income statement. ASU 2024-03, as clarified by ASU 2025-01, is effective for us for our annual reporting for fiscal 2027 and for interim period reporting beginning in fiscal 2028 on a prospective basis. Both early adoption and retrospective application are permitted. The Company is currently evaluating the impact that the adoption of these standards will have on its consolidated financial statements and disclosures.
Recently Adopted Accounting Standards
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disaggregated information about a reporting entity’s effective tax rate reconciliation, as well as information related to income taxes paid to enhance the transparency and decision usefulness of income tax disclosures. The Company adopted ASU 2023-09 for the current year and has elected to apply the standard on a prospective basis.
NOTE 3—INVESTMENT IN OMNIMETRIX
The
Company owns
NOTE 4—ACCOUNTS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES
The
Company has historically experienced immaterial write-offs given the nature of the customers that receive credit. As of December 31,
2025, the Company had gross receivables of $
SCHEDULE OF ACCOUNTS RECEIVABLE
| 2025 | 2024 | |||||||
| As of December 31, | ||||||||
| 2025 | 2024 | |||||||
| (in thousands) | ||||||||
| Accounts Receivable, net, beginning of year | $ | $ | ||||||
| Accounts Receivable, net, end of year | $ | $ | ||||||
The following is a tabular reconciliation of the Company’s allowance for credit losses:
SCHEDULE OF ALLOWANCES FOR CREDIT LOSSES
| 2025 | 2024 | |||||||
| As of December 31, | ||||||||
| 2025 | 2024 | |||||||
| (in thousands) | ||||||||
| Balance at beginning of year | $ | $ | ||||||
| (Decrease) increase in provision for credit losses | ( | ) | ||||||
| Balance at end of year | $ | $ | ||||||
| F-15 |
NOTE 5—INVENTORY
SCHEDULE OF INVENTORY
| 2025 | 2024 | |||||||
| As of December 31, | ||||||||
| 2025 | 2024 | |||||||
| (in thousands) | ||||||||
| Raw materials | $ | $ | ||||||
| Finished goods | ||||||||
| Inventory net | $ | $ | ||||||
At
December 31, 2025 and 2024, the Company’s inventory reserve for obsolescence was $
NOTE 6—PROPERTY AND EQUIPMENT, NET
Property and equipment consists of the following:
SCHEDULE OF PROPERTY AND EQUIPMENT
Estimated Useful Life | As of December 31, | |||||||||
| (in years) | 2025 | 2024 | ||||||||
| (in thousands) | ||||||||||
| Cost: | ||||||||||
| Computer hardware and software | $ | $ | ||||||||
| Equipment | ||||||||||
| Leasehold improvements | ||||||||||
| Intangible asset | ||||||||||
| Accumulated depreciation and amortization | ||||||||||
| Computer hardware and software | ||||||||||
| Equipment | ||||||||||
| Leasehold improvements | ||||||||||
| Intangible asset | ||||||||||
| Property and equipment, net | $ | $ | ||||||||
| * |
During
the year ended December 31, 2024, the Company wrote off fully depreciated equipment and software with an original cost of $
Depreciation
and amortization in respect of property and equipment amounted to $
NOTE 7—LEASES
OmniMetrix
leases office space and office equipment under operating lease agreements. The office lease, originally set to expire on
| F-16 |
Supplemental cash flow information related to leases consisted of the following (in thousands):
SCHEDULE OF SUPPLEMENTAL CASH FLOW INFORMATION RELATED TO LEASES
For the year ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Cash paid for operating lease liabilities | ||||||||
Supplemental balance sheet information related to leases consisted of the following:
SCHEDULE OF SUPPLEMENTAL BALANCE SHEET INFORMATION RELATED TO LEASES
As of December 31, 2025 | ||||
| Weighted average remaining lease terms for operating leases | ||||
The table below reconciles the undiscounted future minimum lease payments under non-cancelable lease agreements having initial terms of more than one year to the total operating lease liabilities recognized on the unaudited condensed consolidated balance sheet as of December 31, 2025 (in thousands):
Year Ended December 31, 2025 | ||||
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Total undiscounted cash flows | ||||
| Less: Imputed interest | ( | ) | ||
| Present value of operating lease liabilities(a) | $ | |||
| (a) |
On
July 6, 2021, the Company entered into an agreement with King Industrial Realty, Inc. to sublease from the Company
Below are the future gross payments expected to be received by the Company under the sublease:
Year ended December 31, 2025 | ||||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| Total undiscounted cash flows | $ | |||
| F-17 |
NOTE 8—COMMITMENTS AND CONTINGENCIES
The
Company has $
NOTE 9— STOCKHOLDERS’ EQUITY (DEFICIT)
(a) Summary Employee Option Information
The Company’s stock option plans provide for the grant to officers, directors and employees of options to purchase shares of common stock. The purchase price may be paid in cash or, if the option is “in-the-money” at the end of the option term, it is automatically exercised “net.” In a net exercise of an option, the Company does not require a payment of the exercise price of the option from the option holder but reduces the number of shares of common stock issued upon the exercise of the option by the smallest number of whole shares that has an aggregate fair market value equal to or in excess of the aggregate exercise price for the option shares covered by the option exercised. Each option is exercisable for one share of the Company’s common stock. Most options expire within five to ten years from the date of the grant and generally vest over a three-year period from the date of the grant.
At December 31, 2025, options were available for grant under the Amended and Restated 2006 Stock Incentive Plan and no options were available for grant under the 2006 Stock Option Plan for Non-Employee Directors. In 2025, options were granted which were to directors and executive officers. In 2024, options were granted ( to directors and executive officers and to other employees). In 2025 and 2024, there were no grants to non-employees (other than the non-employee directors and executive officers). The fair value of the options issued was $ and $ in 2025 and 2024, respectively.
options were exercised in the year ended December 31, 2025. options were exercised in the year ended December 31, 2024. The intrinsic value of options outstanding and of options exercisable at December 31, 2025 was $ and $, respectively. The intrinsic value of options outstanding and of options exercisable at December 31, 2024 was $ and $, respectively.
SCHEDULE OF STOCK OPTIONS FAIR VALUE ASSUMPTIONS ESTIMATED USING BLACK-SCHOLES PRICING MODEL
| 2025 | 2024 | |||||||
| Risk-free interest rate | % | % | ||||||
| Expected term of options, in years | ||||||||
| Expected annual volatility | % | % | ||||||
| Expected dividend yield | % | % | ||||||
| Determined weighted average grant date fair value per option | $ | $ | ||||||
The expected term of the options is the length of time until the expected date of exercising the options. The Company estimated volatility by considering historical stock volatility over the expected term of the option. The risk-free interest rates are based on the U.S. Treasury yields for a period consistent with the expected term. The Company expects no dividends to be paid. The Company believes that the valuation technique and the approach utilized to develop the underlying assumptions are appropriate in determining the estimated fair value of the Company’s stock options granted in the years ended December 31, 2025 and 2024. Estimates of fair value are not intended to predict actual future events or the value ultimately realized by persons who receive equity awards.
| F-18 |
(b) Summary Option Information
SCHEDULE OF STOCK OPTION ACTIVITY
| 2025 | 2024 | |||||||||||||||
Number of Options (in shares) | Weighted Average Exercise Price Per Share | Number of Options (in shares) | Weighted Average Exercise Price | |||||||||||||
| Outstanding at beginning of year | $ | $ | ||||||||||||||
| Granted at market price | $ | $ | ||||||||||||||
| Exercised | ( | ) | $ | $ | ||||||||||||
| Cancelled/forfeited/expired | ( | ) | $ | $ | ||||||||||||
| Outstanding at end of year | $ | $ | ||||||||||||||
| Exercisable at end of year | $ | $ | ||||||||||||||
SUMMARY OF INFORMATION REGARDING TO OPTIONS OUTSTANDING AND EXERCISABLE
| Outstanding | Exercisable | |||||||||||||||||||||
Range of Exercise Prices | Number Outstanding | Weighted Average Remaining Contractual Life | Weighted Average Exercise Price | Number Exercisable | Weighted Average Exercise Price | |||||||||||||||||
| (in shares) | (in years) | (in shares) | ||||||||||||||||||||
| $ | – $ | $ | $ | |||||||||||||||||||
| $ | – $ | $ | $ | |||||||||||||||||||
| $ | – $ | $ | $ | |||||||||||||||||||
Stock-based compensation expense included in selling, general and administrative expense in the Company’s consolidated statements of operations was $ and $ for the years ending December 31, 2025 and 2024, respectively.
The total compensation cost related to non-vested awards not yet recognized was $ and $ as of December 31, 2025 and 2024, respectively, for which the weighted average recognition period is years
(c) Stock Repurchases
On July 2, 2025, the Company repurchased shares at the July 1, 2025 closing market price of $ per share. These shares were the result of a net exercise of stock options previously granted.
On August 19, 2025, the Company repurchased shares at the August 18, 2025 closing market price of $ per share. These shares were the result of a net exercise of stock options previously granted.
NOTE 10—INCOME TAXES
At
each reporting period, the Company considered all the positive and negative evidence related to the likelihood of realization of the
deferred tax assets and determined, based on the weight of available evidence, it is more likely than not that some of the deferred tax
assets will be realized. As of December 31, 2025 and 2024 the Company recorded $
(a) Composition of income before income taxes is as follows (in thousands):
SCHEDULE OF COMPOSITION OF INCOME (LOSS) BEFORE INCOME TAXES
Year ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Domestic | $ | $ | ||||||
| F-19 |
Income tax (benefit) expense consists of the following (in thousands):
SCHEDULE OF INCOME TAX (BENEFIT) EXPENSE
| 2025 | 2024 | |||||||
Year ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Current: | ||||||||
| Federal | $ | $ | ||||||
| State and local | ||||||||
| Current income tax expense | ||||||||
| Deferred: | ||||||||
| Federal | ( | ) | ( | ) | ||||
| State and local | ( | ) | ||||||
| Deferred income tax expense (benefit) | ( | ) | ( | ) | ||||
| Total income tax expense (benefit) | $ | ( | ) | $ | ( | ) | ||
(b) Effective Income Tax Rates
Set forth below is a reconciliation between the federal tax rate and the Company’s effective income tax rates with respect to continuing operations:
SCHEDULE OF RECONCILIATION BETWEEN FEDERAL TAX RATE AND EFFECTIVE INCOME TAX RATES
| 2025 | 2025 | |||||||
Year ended December 31, | ||||||||
| 2025 | 2025 | |||||||
| Statutory Federal rates | $ | % | ||||||
| Increase (decrease) in income tax rate resulting from: | ||||||||
| Nondeductible/nontaxable items | ||||||||
| Stock compensation | ( | ) | )% | |||||
| Other nondeductible/nontaxable items | % | |||||||
| State and local income taxes, net of federal taxes(a) | % | |||||||
| Rate change | ||||||||
| Rate change adjustment | ||||||||
| Deferred true-ups | — | |||||||
| NOL Expirations | % | |||||||
| Other, net (primarily permanent differences) | ||||||||
| Valuation allowance | ( | ) | ( | )% | ||||
| Effective income tax rates | ( | ) | ( | )% | ||||
| (a) |
Georgia
North Carolina
Pennsylvania
The rate reconciliation above has been adjusted to be presented in compliance with the guidance under ASU 2023-09. The Company has adopted this guidance on a prospective basis.
As previously disclosed for the year ended December 31, 2024, prior to the adoption of ASU No. 2023-09, the following reconciles the federal tax rate and the Company’s effective income tax rates with respect to continuing operations:
Year ended December 31, | ||||
| 2024 | ||||
| Statutory Federal rates | % | |||
| Increase (decrease) in income tax rate resulting from: | ||||
| Nondeductible/nontaxable items | % | |||
| State taxes | % | |||
| Rate change | ( | )% | ||
| Rate change adjustment | % | |||
| Deferred true ups | ( | )% | ||
| Valuation allowance | ( | )% | ||
| Effective income tax rates | ( | )% | ||
| F-20 |
(c) Analysis of Deferred Tax Assets and (Liabilities) (in thousands):
SCHEDULE OF DEFERRED TAX ASSETS AND (LIABILITIES)
| 2025 | 2024 | |||||||
As of December 31, | ||||||||
| 2025 | 2024 | |||||||
| Deferred tax assets (liabilities) consist of the following: | ||||||||
| Employee benefits and deferred compensation | $ | $ | ||||||
| Deferred revenue | ||||||||
| Lease liability | ||||||||
| Intangible assets | ||||||||
| Other temporary differences | ||||||||
| Section 174 expenditures | ||||||||
| NOL and capital loss carryforwards | ||||||||
| Total deferred tax assets | ||||||||
| Valuation allowance | ( | ) | ( | ) | ||||
| Net deferred tax asset | ||||||||
| Right-of-use asset | ( | ) | ( | ) | ||||
| Fixed assets | ( | ) | ( | ) | ||||
| Total deferred tax liabilities | ( | ) | ( | ) | ||||
| Net deferred tax assets | $ | $ | ||||||
Valuation
allowances relate primarily to NOL carryforwards related to the Company’s consolidated tax losses as well as state tax losses related
to the Company’s OmniMetrix subsidiary. During the years ended December 31, 2025 and 2024, the valuation allowance decreased by
$
(d) Summary of Tax Loss Carryforwards
As of December 31, 2025, the Company had various NOL carryforwards expiring as follows (in thousands):
SCHEDULE OF NET OPERATING LOSS CARRYFORWARDS
| Expiration | Federal | State | ||||||
| 2026 – 2031* | ||||||||
| 2032 – 2037 | ||||||||
| Subject to Expiration | ||||||||
| Unlimited | ||||||||
| Total | $ | $ | ||||||
| * |
The utilization of the Company’s pre 2012 federal and state net operating losses may be subject to limitation under the Internal Revenue Code, as well as similar state provisions. Such limitations may result in the expiration of those net operating loss (NOL) carryforwards before their utilization. During 2025 the Company completed a Section 382 study and determined that no change of control occurred and the NOLs generated during the period of 2012 – 2024 will not be subject to limitation. Future changes in the Company’s stock ownership, which may be outside of the Company’s control may trigger an “ownership change” which could result in limitations under the Internal Revenue Code.
The Company maintains a valuation allowance against certain deferred tax assets where management has determined it is more-likely-than-not that such assets will not be realized. Any limitation under Section 382 may require the Company to increase its valuation allowance or could otherwise adversely impact the timing of tax benefits recognized in future periods.
On July 4, 2025, the One Big Beautiful Bill was enacted (“OBBBA”), introducing significant and wide-ranging changes to the U.S. federal tax system. Significant components include restoration of 100% accelerated tax depreciation on qualifying property including expansion to cover qualified production property. Another major aspect includes the return to immediate expensing of domestic research and experimental expenditures (“R&E”) which in some cases may include retroactive application back to 2021 for businesses with gross receipts of less than $31 million or accelerated tax deductions of R&E that was previously capitalized for larger businesses. The legislation also reinstates EBITDA-based interest deductions for tax purposes and makes several business tax incentives permanent. Less favorable business provisions include limitations on tax deductions for charitable contributions.
| F-21 |
The Company is also subject to certain non-income taxes such as value added taxes, sales taxes, and property taxes. The Company has taken certain positions that management feels, although not free from doubt, should not result in a successful challenge by certain tax authorities.
NOTE 11—RELATED PARTY BALANCES AND TRANSACTIONS
The
Company recorded fees to officers of $
The
Company recorded fees to directors of $
The Company granted options (all to directors and executive officers) and options ( to directors and executive officers and to other employees) in 2025 and 2024, respectively. options were exercised in the year ended December 31, 2025. options were exercised in the year ended December 31, 2024. See Note 9 for further discussion.
Each Director of the Company may elect by written notice delivered on or before the first day of each calendar year whether to receive, in lieu of some or all of his or her retainer and board fees, that number of shares of Company common stock as shall have a value equal to the applicable retainer and board fees, based on the closing price of the Company’s common stock on its then-current trading platform or exchange on the last trading day immediately preceding the first day of the applicable year. Once made, the election shall be irrevocable for such election year and the shares subject to the election shall vest and be issued one-fourth upon the first day of the election year and one-fourth as of the first day of each of the second through fourth calendar quarters thereafter during the remainder of the election year.
NOTE 12—SEGMENT REPORTING AND GEOGRAPHIC INFORMATION
(a) General Information
As
of December 31, 2025, the Company continues to operate in
The Company’s reportable segments are strategic business units, offering different products and services and are managed separately by the CODM as each business requires different technology and marketing strategies.
The CODM is the Company’s Chief Executive Officer (CEO).
(b) Information about profit or loss and assets
The accounting policies of all the segments are those described in the summary of significant accounting policies. The Company evaluates performance by segment based on revenue (driven by the number of connections), gross profit and net income or loss before taxes.
The Company does not systematically allocate assets to the divisions of the subsidiaries constituting its consolidated group, unless the division constitutes a significant operation. Accordingly, where a division of a subsidiary constitutes a segment that does not meet the quantitative thresholds of applicable accounting principles, depreciation expense is recorded against the operations of such segment, without allocating the related depreciable assets to that segment. However, where a division of a subsidiary constitutes a segment that does meet the quantitative thresholds, related depreciable assets, along with other identifiable assets, are allocated to such division.
Segment expense that is routinely provided to the CODM is COGS and R&D expense. R&D expense is allocated to each segment based on estimated time on projects within the segment. SG&A expense and interest income is allocated to each segment based on the percentage of segment revenue to total revenue instead of being specifically identified to each segment since the Company’s resources have a high level of shared utilization between the segments. Further, the CODM does not review the assets by segment.
| F-22 |
The following tables represent segmented data for the years ended December 31, 2025 and 2024 (in thousands).
SCHEDULE OF SEGMENTED DATA
| PG | CP | Total | ||||||||||
| Year ended December 31, 2025: | ||||||||||||
| Revenues from external customers | $ | $ | $ | |||||||||
| COGS | ||||||||||||
| Segment gross profit | ||||||||||||
| R&D expense | ||||||||||||
| SG&A expense | ||||||||||||
| Segment operating income | ||||||||||||
| Interest income, net | ||||||||||||
| Segment income before income taxes | $ | $ | $ | |||||||||
| Year ended December 31, 2024: | ||||||||||||
| Revenues from external customers | $ | $ | $ | |||||||||
| COGS | ||||||||||||
| Segment gross profit | ||||||||||||
| R&D expense | ||||||||||||
| SG&A expense | ||||||||||||
| Segment operating income | ||||||||||||
| Interest income, net | ||||||||||||
| Segment income before income taxes | $ | $ | $ | |||||||||
(c) The following tables represent a reconciliation of the segment data to the consolidated statement of operations and balance sheet data for the years ended and as of December 31, 2025 and 2024 (in thousands):
SCHEDULE OF RECONCILIATION OF SEGMENT DATA TO CONSOLIDATED STATEMENT OF OPERATIONS
| 2025 | 2024 | |||||||
Year ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Total net income before income taxes for reportable segments | $ | $ | ||||||
| Unallocated cost of corporate headquarters, net of interest income | ( | ) | ( | ) | ||||
| Consolidated net income before income taxes | $ | $ | ||||||
| 2025 | 2024 | |||||||
As of December 31, | ||||||||
| 2025 | 2024 | |||||||
| Assets: | ||||||||
| Total assets for OmniMetrix subsidiary | $ | $ | ||||||
| Assets of corporate headquarters | ||||||||
| Deferred tax assets | ||||||||
| Total consolidated assets | $ | $ | ||||||
SCHEDULE OF REVENUE FROM CUSTOMERS BY GEOGRAPHICAL AREAS
| 2025 | 2024 | |||||||
Year ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Revenues based on location of customer: | ||||||||
| United States | $ | $ | ||||||
| Other | ||||||||
| Revenues | $ | $ | ||||||
All of the Company’s long-lived assets are located in the United States.
(d) Revenues and Accounts Receivable Balances from Major Customers (in thousands):
SCHEDULE OF REVENUES AND ACCOUNTS RECEIVABLE BALANCES FROM MAJOR CUSTOMERS
| Invoiced Sales | Accounts Receivable | |||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||||||
| Customer | Total | % | Total | % | Balance | % | Balance | % | ||||||||||||||||||||||||
| A | $ | % | $ | % | $ | % | $ | % | ||||||||||||||||||||||||
| The revenue and accounts receivable of customer A are within the PG segment. |
| F-23 |
NOTE 13—REVENUE
OmniMetrix sells monitoring equipment (“HW”) and monitoring services (“Monitoring”). Prior to September 1, 2023, sales of OmniMetrix equipment typically did not qualify as a separate unit of accounting. As a result, revenue (and related costs) associated with sale of equipment was recorded to deferred revenue (and deferred cost of goods sold) upon shipment of PG and CP monitoring units. Revenue and related costs with respect to the sale of equipment were recognized over the estimated life of the units which was estimated to be three years. On September 1, 2023, OmniMetrix launched an updated version of its products that includes new functionality in its TrueGuard, AIRGuard, Patriot and Hero products that allows its customers to have options as it relates to obtaining and utilizing the data that is provided by its hardware devices. This new functionality allows for SIM card options, configuration options regarding IP address endpoints and DNS routes, and access to OmniMetrix’s over-the-air data protocol. This product update allows customers to have the option to purchase OmniMetrix’s monitoring service, monitor the products themselves if they have the ability in-house, or choose another monitoring provider if they so desire. OmniMetrix’s prior hardware product version could not function as a distinct product independent from its monitoring services. This new version’s functionality results in OmniMetrix’s hardware and monitoring services being capable of being two distinct products and services. OmniMetrix recognizes revenue, COGS and commissions from the sale of the new version of its hardware products when the product is shipped rather than over the estimated time that the unit is in service for the customer. The remaining balance of deferred hardware revenue from the prior version of these products will continue to be amortized each period until it is fully amortized. The modifications to the circuit boards and embedded firmware of hardware enclosures in inventory as of August 31, 2023 were made such that only the new version of these products was sold subsequent to this date.
The following table disaggregates the Company’s revenue for the years ended December 31, 2025 and 2024 (in thousands):
SCHEDULE OF DISAGGREGATES OF REVENUE
| HW | Monitoring | Total | ||||||||||
| Year ended December 31, 2025: | ||||||||||||
| PG Segment | $ | $ | $ | |||||||||
| CP Segment | ||||||||||||
| Total Revenue | $ | $ | $ | |||||||||
| HW | Monitoring | Total | ||||||||||
| Year ended December 31, 2024: | ||||||||||||
| PG Segment | $ | $ | $ | |||||||||
| CP Segment | ||||||||||||
| Total Revenue | $ | $ | $ | |||||||||
Deferred revenue activity for the year ended December 31, 2025 can be seen in the table below (in thousands):
SCHEDULE OF DEFERRED REVENUE ACTIVITY
| HW | Monitoring | Total | ||||||||||
| Balance at December 31, 2024 | $ | $ | $ | |||||||||
| Additions during the period | ||||||||||||
| Recognized as revenue | ( | ) | ( | ) | ( | ) | ||||||
| Balance at December 31, 2025 | $ | $ | $ | |||||||||
| Amounts to be recognized as revenue in the year ending: | ||||||||||||
| December 31, 2026 | $ | $ | $ | |||||||||
| December 31, 2027 | ||||||||||||
| December 31, 2028 and thereafter | ||||||||||||
| Total | $ | $ | $ | |||||||||
| F-24 |
The
amount of hardware revenue recognized during the year ended December 31, 2025 that was included in deferred revenue at the beginning
of the fiscal year was $
Deferred revenue activity for the year ended December 31, 2024 can be seen in the table below (in thousands):
| HW | Monitoring | Total | ||||||||||
| Balance at December 31, 2023 | $ | $ | $ | |||||||||
| Balance | $ | $ | $ | |||||||||
| Additions during the period | ||||||||||||
| Recognized as revenue | ( | ) | ( | ) | ( | ) | ||||||
| Balance at December 31, 2024 | $ | $ | $ | |||||||||
| Balance | $ | $ | $ | |||||||||
SCHEDULE OF RECONCILIATION OF HARDWARE REVENUE
| Reconciliation of Hardware Revenue | 2025 | 2024 | ||||||
| Amortization of deferred revenue | $ | $ | ||||||
| Sales of custom designed units and related accessories | ||||||||
| Hardware sales under the Material Contract | ||||||||
| Hardware sales | ||||||||
| Other accessories, services, shipping and miscellaneous charges | ||||||||
| Total hardware revenue | $ | $ | ||||||
Deferred charges relate only to the sale of HW. Deferred charges activity for the year ended December 31, 2025 can be seen in the table below (in thousands):
SCHEDULE OF DEFERRED CHARGES ACTIVITY
| Balance at December 31, 2024 | $ | |||
| Additions during the period | ||||
| Recognized as cost of sales | ( | ) | ||
| Balance at December 31, 2025 | $ | |||
| Amounts to be recognized as cost of sales in the year ending: | ||||
| December 31, 2026 | $ |
Deferred charges relate only to the sale of HW. Deferred charges activity for the year ended December 31, 2024 can be seen in the table below (in thousands):
| Balance at December 31, 2023 | $ | |||
| Additions during the period | ||||
| Recognized as cost of sales | ( | ) | ||
| Balance at December 31, 2024 | $ |
The following table provides a reconciliation of the Company’s sales commissions contract assets for the year ended December 31, 2025 (in thousands):
SCHEDULE OF SALES COMMISSIONS CONTRACT ASSETS
| HW | Monitoring | Total | ||||||||||
| Balance at December 31, 2024 | $ | $ | $ | |||||||||
| Additions during the period | ||||||||||||
| Amortization of sales commissions | ( | ) | ( | ) | ( | ) | ||||||
| Balance at December 31, 2025 | $ | $ | $ | |||||||||
| F-25 |
The
capitalized sales commissions are included in other current assets ($
SCHEDULE OF SALES COMMISSIONS EXPENSE
| Amounts to be recognized as sales commissions expense in the year ending: | ||||
| December 31, 2026 | $ | |||
| December 31, 2027 | ||||
| December 31, 2028 and thereafter | ||||
| Total | $ |
| HW | Monitoring | Total | ||||||||||
| Balance at December 31, 2023 | $ | $ | $ | |||||||||
| Balance | $ | $ | $ | |||||||||
| Additions during the period | ||||||||||||
| Amortization of sales commissions | ( | ) | ( | ) | ( | ) | ||||||
| Balance at December 31, 2024 | $ | $ | $ | |||||||||
| Balance | $ | $ | $ | |||||||||
The
capitalized sales commissions are included in other current assets ($
NOTE 14—SUBSEQUENT EVENTS
On January 1, 2026, the Company entered into a strategic technology partnership with AIO Systems, Ltd. to expand the Company’s infrastructure asset management technology offerings for cell towers, data centers, and utility assets in North America. Under the agreement, the Company has exclusive rights to market, distribute, integrate, and sell AIO’s cloud-based monitoring and analytics solutions under the OmniMetrix brand in the United States, Canada, and Mexico, significantly expanding the Company’s product portfolio and addressable market. The partnership leverages AIO’s globally-deployed technology and provides for shared Software-as-a-Solution (SaaS) and monitoring revenues, with Acorn expecting a phased rollout and limited near-term revenue contribution as integration and market expansion efforts progress.
On
January 19, 2026, options, each, were issued to the CEO and CFO with an exercise price of $
On
February 4, 2026, options, in the aggregate, previously issued to board members and that were set to expire on February 5, 2026
were exercised at an exercise price of $
| F-26 |
EXHIBIT 4.1
DESCRIPTION OF COMMON STOCK
This exhibit describes the general terms of our Common Stock, par value $0.01 per share. This is a summary and does not purport to be complete. Our Certificate of Incorporation, as amended and restated, and our By-laws, as amended, as they exist on the date of this Annual Report on Form 10-K are incorporated by reference or filed as an exhibit to the Annual Report on Form 10-K of which this exhibit is a part, and amendments or restatements of each will be filed with the Securities and Exchange Commission (the “SEC”) in future periodic or current reports in accordance with the rules of the SEC. You are encouraged to read these documents.
For more detailed information about the rights of our common stock, you should refer to our Certificate of Incorporation, as amended, and our By-laws, as amended, and the applicable provisions of Delaware law.
Our Common Stock is registered under Section 12(b) of the Securities Exchange Act of 1934 and trades on The Nasdaq Stock Market LLC. Holders of the Common Stock are entitled to one vote per share, to receive dividends when, as and if declared by our Board of Directors and to share ratably in our assets legally available for distribution to holders of the Common Stock in the event of a liquidation, dissolution or winding up of our company. Holders of the Common Stock do not have subscription, redemption, conversion or preemptive rights. Holders of the Common Stock are entitled to elect all of the members of our Board of Directors. Holders of the Common Stock do not have cumulative voting rights and therefore, the holders of a majority of the Common Stock can elect all of our Directors. Our Board is empowered to fill any of its vacancies created by the resignation of Directors. Except as otherwise required by the Delaware General Corporation Law, all stockholder action (other than the election of Directors, who are elected by a plurality vote) is subject to approval by a majority of the shares of the Common Stock present at a stockholders’ meeting at which a quorum (a majority of the issued and outstanding shares of the Common Stock) is present in person or by proxy, or by written consent pursuant to Delaware law.
EXHIBIT 10.6
CONSULTING AGREEMENT
This Consulting Agreement (this “Agreement”) is made as of this 19th day of January, 2026, by and between Acorn Energy, Inc. (the “Company”) and Jan H. Loeb (“Loeb”).
R E C I T A L S:
WHEREAS, the Board of Directors of the Company (the “Board”) appointed Loeb to serve as the Company’s President and Chief Executive Officer in January 2016; and
WHEREAS, the Board appointed Loeb to the additional position of Acting CEO of the Company’s OmniMetrix, LLC subsidiary (“OmniMetrix”) in November 2019; and
WHEREAS, the Board desires to engage Loeb, upon the terms and conditions hereinafter set forth, to continue provide consulting and other services to the Company and to OmniMetrix as provided for herein; and
WHEREAS, Loeb has agreed to provide such consulting and other services to the Company and to OmniMetrix, upon the terms and conditions hereinafter set forth;
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:
1. Engagement. The Company hereby agrees to engage Loeb to render the consulting and other services described herein, and Loeb hereby accepts such engagement.
2. Term. The engagement of Loeb by the Company as provided in Section 1 shall be deemed to have commenced effective January 1, 2026, and continue through and until December 31, 2026, unless earlier terminated as hereinafter provided (the period of such engagement, the “Term”).
3. Services. Loeb shall provide such consulting services to the Company as Loeb and the Company shall mutually agree upon from time to time. Loeb shall serve as the Company’s principal executive officer in the capacities of President and Chief Executive Officer and shall also serve as principal executive officer of the Company’s OmniMetrix subsidiary in the capacity of Acting CEO, with all the power and authority and executing all the functions associated with such offices, and shall commit sufficient business time to effectively discharge the responsibilities of President and Chief Executive Officer of the Company and Acting CEO of OmniMetrix, without any additional compensation beyond that provided for in this Agreement. The foregoing notwithstanding, nothing in this Agreement shall restrict Loeb from performing his other duties at Leap Tide and/or accepting consulting or employment arrangements or other positions outside of his activities for the Company.
4. Payment and Expenses.
(a) Cash Payment. The Company shall pay to Loeb compensation in the amount of $17,283 per month during the Term for service as President and Chief Executive Officer of the Company, and additional $10,300 per month during the Term for so long as he serves as Acting CEO of OmniMetrix.
(b) Options. Upon the execution of this Agreement, Loeb shall be granted 25,000 stock options exercisable at an exercise price equal to the then-current stock price. One-twelfth of such options will be vested immediately; the remaining options will vest in eleven equal quarterly increments beginning on April 1, 2026, unless such vesting is accelerated in connection with a Change of Control as set forth below in Section 4(c). The options will allow for cashless exercise if there is no effective registration statement covering the issuance or resale of the shares underlying the options. The exercise period and other terms shall otherwise be substantially the same as the terms of the options granted by the Company to its outside directors.
(c) Change of Control. Notwithstanding the vesting schedule set forth above in Section 4(b), immediately prior to the occurrence of a Change of Control (as defined in the following sentence), the vesting of all stock options granted hereunder shall immediately be accelerated and all such options shall be deemed to be fully vested and exercisable. “Change of Control” means the first occurrence of any of the following: (1) the acquisition by any entity or natural person, or a group of entities and/or natural persons acting together, of a majority of the equity interests of the Company, OMX Holdings, Inc. or OmniMetrix, whether through purchase, merger, stock swap, or any similar deal structure; and (2) the sale or other disposition of all or substantially all the assets of the Company, OMX Holdings, Inc. or OmniMetrix.
(d) Expenses. Loeb shall be entitled to reimbursement for any out-of-pocket expenses (travel, transportation, office, etc.) incurred in connection with the consulting services rendered pursuant hereto.
(e) D&O Coverage. The Company has confirmed that Loeb will be covered by the Company’s primary and excess D&O insurance policy in his capacities of director as well as President and Chief Executive Officer, notwithstanding the fact that he is not an employee of the Company, on the same basis as the other directors and executive officers of the Company.
(f) No Other Compensation. Other than as set forth herein or otherwise agreed in writing, Loeb shall not receive any other compensation or benefits in connection with this Agreement or his service as a director and President and Chief Executive Officer of the Company.
5. Termination. The Term of this Agreement may be terminated early for any or no reason with or without cause (i) by Loeb at any time upon thirty (30) days’ written notice to the Company and (ii) by the Company on at least 15 (fifteen) days’ written notice to Loeb. In the event if a termination of this Agreement at the end of the Term or upon an early termination in accordance with this Section, the Company shall no longer be obligated to pay the monthly cash compensation provided for in Section 4(a) but shall be required to pay any accrued and unpaid amounts payable to Loeb under Section 4.
6. Covenants of Loeb.
(a) Loeb recognizes that the knowledge of, information concerning, and relationship with, customers, suppliers and agents, and the knowledge of the Company’s business methods, systems, plans and policies which Loeb will establish, receive or obtain as a consultant to the Company, are valuable and unique assets of the business of the Company. Loeb will not, during or following the Term, use or disclose any such knowledge or information pertaining to the Company, its customers, suppliers, agents, policies or other aspects of its business, for any reason or purpose, whatsoever except pursuant to Loeb’s duties hereunder or as otherwise authorized by the Company in writing. The foregoing restriction shall not apply, following termination of Loeb’s engagement hereunder, to knowledge or information which (i) is in or enters the public domain without violation of this Agreement or other obligations of confidentiality by Loeb or his agents or representatives, (ii) Loeb can demonstrate was in his possession on a non-confidential basis prior to the commencement of this engagement with the Company, or (iii) Loeb can demonstrate was received or obtained by him on a non-confidential basis from a third party who did not acquire it wrongfully or under an obligation of confidentiality, subsequent to the termination of Loeb’s engagement hereunder.
(b) All memoranda, notes, records or other documents made or compiled by Loeb or made available to Loeb while engaged concerning customers, suppliers, agents or personnel of the Company, or the Company’s business methods, systems, plans and policies, shall be the Company’s property and shall be delivered to the Company on termination of Loeb’s engagement or at any other time on request.
(c) During the term of Loeb’s engagement and for one year thereafter, Loeb shall not, except pursuant to and in furtherance of Loeb’s duties hereunder, directly or indirectly solicit or initiate contact with any employee of the Company or its subsidiaries with a view to inducing or encouraging such employee to leave the employ of the Company for the purpose of being hired by Loeb, an employer affiliated with Loeb or any competitor of the Company.
(d) Loeb acknowledges that the provisions of this section are reasonable and necessary for the protection of the Company and that the Company will be irrevocably damaged if such covenants are not specifically enforced. Accordingly, Loeb agrees that, in addition to any other relief to which the Company may be entitled in the form of actual or punitive damages, the Company shall be entitled to seek and obtain injunctive relief from a court of competent jurisdiction for the purposes of restraining Loeb from any actual or threatened breach of such covenants.
7. Independent Contractor Status. It is the express intention of the Company and Loeb that Loeb performs the covered services under this Agreement, including his services as President and Chief Executive Officer of the Company, as an independent contractor. Nothing in this Agreement shall in any way be construed to constitute Loeb as an employee.
8. Entire Agreement. This Agreement contains the entire understanding of the parties with respect to the subject matter hereof. This Agreement may not be modified or extended except by a writing signed by both parties hereto. This Agreement shall be binding upon and inure to the benefit of the parties and their respective legal representatives, successors and assigns.
9. Governing Law. This Agreement and all matters and issues collateral thereto shall be governed by the laws of the State of Delaware applicable to contracts performed entirely therein.
10. Severability. If any provision of this Agreement, as applied to either party or to any circumstance, shall be adjudged by a court to be void and unenforceable, the same shall in no way affect any other provision of this Agreement or the validity or enforceability thereof.
11. Notices. All notices or other communications hereunder shall be given in writing and shall be deemed given if served personally, mailed by registered or certified mail, return receipt requested or sent by nationally recognized courier service, to the parties at the addresses below, or at such other address or addresses as they may hereafter designate in writing.
If to the Company:
1000 N West Street
Suite 1200
Wilmington, Delaware 19801
If to Loeb:
7740 Cavern Lane
Parkland, Florida 33067
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and year first above written.
| Jan H. Loeb |
| ACORN ENERGY, INC. | ||
| By: | ||
|
Tracy S. Clifford, CFO |
||
EXHIBIT 10.7
AMENDED AND RESTATED CONSULTING AGREEMENT
This Amended and Restated Consulting Agreement (“Agreement”) is made this 19th day of January 2026, and effective as of January 1, 2026 (the “Effective Date”), by and between ACORN ENERGY, INC., a corporation organized under the laws of Delaware (the “Company”) and TRACY CLIFFORD CONSULTING, LLC, a limited liability company organized under the laws of South Carolina (“Consultant”), and amends, restates and replaces in its entirety the Amended and Restated Consulting Agreement dated as of January 2, 2024 by and between Company and Consultant. The Company and Consultant may be referred to herein collectively as the “Parties” or individually as a “Party”.
WHEREAS, Tracy Clifford (“Clifford”) is the owner of Consultant;
WHEREAS, the Company desires to retain Consultant as an independent contractor to provide to Company Clifford’s services as Chief Financial Officer (“CFO”) of the Company and Chief Operating Officer (“COO”) of the Company’s OmniMetrix, LLC subsidiary (“OmniMetrix”), and Consultant desires to provide such services to the Company; and
WHEREAS, the Company and the Consultant wish to enter into an agreement with respect to the provision of such services upon the terms provided herein;
NOW, THEREFORE, for and in consideration of the mutual agreements contained herein and other good and valuable consideration, the Parties, intending to be legally bound, agree as follows:
1. Nature and Term of Consultant Position.
(a) Consultant will provide Clifford’s services to the Company during the Consulting Term (as defined below) in the nature of certain financial-related and other consulting services as CFO for the Company and COO of OmniMetrix, as reasonably may be requested of Consultant by the Chief Executive Officer or other designated officer of the Company (“Consulting Services”).
(b) Company will use the Consulting Services of Consultant, and Consultant will provide such Consulting Services to the Company, from January 1, 2026, through the earlier of (i) the date of its termination as provided in Section 1(c) and (ii) December 31, 2026 (the “Consulting Term”). This Agreement shall automatically renew for an additional one-year Consulting Term beginning the day after expiration of each Consulting Term unless otherwise terminated as provided in Section 1(c).
(c) This Agreement will terminate immediately upon the death or disability of Clifford. Consultant may terminate this Agreement, for any reason or no reason at all, upon thirty (30) days written notice to the Company. The Company may terminate this Agreement, for cause or for any other reason or no reason at all, effective immediately upon written notice to Consultant. In the event of such termination by the Company other than for cause, Consultant shall be entitled to a continuation, for a period of six months following the date of such termination by the Company, of the monthly cash compensation in effect for the Consulting Services at the time of such termination by the Company.
(d) Clifford will be an independent contractor and not an Employee of Company and will determine how to accomplish tasks as may be assigned by the Company. Each party is responsible for all its own tax matters related to this Agreement. Consultant shall solely be responsible for determining and paying any and all taxes, withholdings, levies and assessments on any compensation payable hereunder. Company shall not be responsible for payment of disability benefits, unemployment, medical or life insurance or income tax withholding or other taxes for Consultant. Clifford acknowledges that she will not have the right to be included in any employee benefit plans that may be provided to employees of Company.
(e) With respect to the provision of Consulting Services as CFO of the Company, Clifford shall perform reasonable, usual and customary duties of a CFO and shall act as principal accounting officer and principal financial officer of the Company as defined in applicable regulations of the Securities and Exchange Commission. Consultant warrants that Clifford has no outstanding agreement or obligation that conflicts with any of the provisions of this Agreement, or that would preclude or in any way compromise Consultant or Clifford or breach any duty of confidentiality owed by Consultant or Clifford to others, arising from compliance with the provisions hereof. The Parties acknowledge that Consultant and Clifford provide and will continue to provide related consulting services to other clients.
(f) If prior commitments preclude Clifford from performing any Consulting Services when requested by the Company, the Parties will determine a revised schedule that reasonably accommodates both commitments; except that in the event of an emergency, Clifford will be available at least telephonically. All out-of-pocket travel expenses shall be handled as provided in Section 2(a).
(g) During the Consulting Term, Clifford may be located anywhere in the United States of America provided that Clifford remains available to Company by means of telephone and emails.
2. Compensation and Payment.
(a) Consultant will be compensated in cash at the rate of $18,565.75 per month for performance of the Consulting Services. Company shall reimburse Consultant for reasonable and necessary expenses, related to all travel or otherwise, which shall include but is not limited to airline, hotel, transportation, and meals. The Company shall pay Consultant monthly by no later than the 1st of each month, which shall be paid in advance of the month worked.
(b) As additional compensation for the Consulting Services, on January 19, 2026, and on each subsequent anniversary of January 1, 2026, so long as this Agreement has not been terminated, Company shall grant Clifford 25,000 stock options exercisable at an exercise price equal to the then-current stock price. One-twelfth of such options will be vested immediately as of the date of the respective grant; the remaining options will vest in eleven equal quarterly increments beginning on April 1 of the year of the respective grant, unless such vesting is accelerated in connection with a Change of Control as set forth below in Section 2(c). The exercise period and other terms shall otherwise be substantially the same as the terms of the options granted by the Company to its outside directors.
(c) Notwithstanding the vesting schedule set forth above in Section 2(b), immediately prior to the occurrence of a Change of Control (as defined in the following sentence), the vesting of all stock options granted hereunder shall immediately be accelerated and all such options shall be deemed to be fully vested and exercisable. “Change of Control” means the first occurrence of any of the following: (1) the acquisition by any entity or natural person, or a group of entities and/or natural persons acting together, of a majority of the equity interests of the Company, OMX Holdings, Inc. or OmniMetrix, whether through purchase, merger, stock swap, or any similar deal structure; and (2) the sale or other disposition of all or substantially all the assets of the Company, OMX Holdings, Inc. or OmniMetrix.
(d) Company shall have Directors and Officers insurance and errors and omissions liability insurance in the amount of $3.0 million dollars ($3,000,000), naming Consultant as additional insured as chief financial officer or alternatively shall provide a letter from the carrier confirming that Clifford is a person covered under the policy on the same basis as the other executive officers of the Company. Company shall provide a copy of the policy declaration page, or the equivalent, to the Consultant upon the activation of the policy and thereafter annually as evidence of current compliance with its insurance obligation under this Agreement. Company shall pay the premium on all such liability insurance.
3. Liabilities, Indemnification and Warranties
(a) It is understood and agreed that Consultant’s services will include advice and recommendations to Company management, but all decisions in connection with the application and use of such advice shall be the sole and exclusive responsibility and decision of Company. Company shall be responsible for the accuracy, integrity and completeness of all data and information provided to Consultant for purposes of performance of the Consulting Services. Consultant shall not be under any obligation to search for errors or flaws in Company’s data.
(b) Company shall fully indemnify, defend and hold harmless Consultant, its members, officers, consultant, employees, agents, and successors from and against any and all losses, claims, liability, damages, demands, suits, actions, costs, expenses (including, without limitation, settlement costs, attorney’s fees and court costs) directly or indirectly related to or in connection with this Agreement, Consultant’s performance or failure to perform under this Agreement other than as may arise from Clifford’s gross negligence or willful misconduct.
4. Confidentiality
(a) Consultant shall not disclose any information of Company (“Confidential Information”), relating to (i) the customers, clients, employees and accounts; (ii) business methods, systems, plans, policies, and personnel; or (iii) the technical data, trade secrets, or know-how, including, but not limited to, research, product plans, products, services, markets, software, developments, inventions, processes, formulas, technology, designs, drawings, engineering, hardware, configuration information, marketing, taxes, finances or other business information, either directly or indirectly, whether in writing, orally or by drawings or inspection of parts or equipment. All such information is considered Confidential Information, whether or not marked as such, and is the sole and exclusive property of the Company. This provision will survive the termination of this Agreement for a period of three (3) years unless disclosures is required pursuant to court order.
(b) Consultant acknowledges that the services to be rendered by the Consultant are of a special, unique and extraordinary character, and in connection with such services, Consultant will have access to Confidential Information vital to Company’s business. By reason of this, Consultant agrees that if Consultant violates any of the provisions of this Agreement with respect to confidentiality, Company would sustain irreparable harm, and therefore, in addition to any other remedies that Company may have as provided by law, Company will be entitled, without proof or bond, to equitable relief, including specific performance and an injunction restraining Consultant from committing or continuing any such violation of this Agreement.
(c) Except to the extent necessary to perform the Consulting Services to be performed by Consultant under this Agreement, Consultant will not copy, reproduce, use, distribute, disclose or otherwise disseminate the Confidential Information, or any physical embodiment thereof, and will in no event take any action causing, or fail to take any action necessary in order to prevent, any Confidential Information disclosed to or developed by Consultant to lose its character as or cease to be Confidential Information.
5. Notices.
(a) At any time upon written request of Company, and in the event upon termination of this Agreement for any reason, Consultant will promptly deliver to Company or destroy upon direction of the Company all property belonging to Company, including without limitation all Confidential Information and all embodiments thereof then in its use, custody, control or possession. Compliance with this Section shall not operate to limit Company’s rights to enforcement of this or any other covenant, including enforcement by injunctive relief.
(b) Any notice, request, demand or other communication required or permitted to be given under this Agreement will be sufficient if in writing, and if delivered personally, or sent by Priority, Certified or Registered mail to the Party’s last known address.
6. Assignment.
This Agreement will inure to the benefit of, and be binding upon Company and its successors and assigns. This Agreement will be binding on Consultant, Consultant’s successors, assigns, heirs, executors or administrators, and legal representatives. However, this Agreement will not be assignable by Consultant nor the Company.
7. Severability
The provisions of this Agreement are deemed by the Parties to be severable, and the invalidity or unenforceability of any one or more of the provisions of this Agreement shall not affect the validity or enforceability of any other provision.
8. Applicable Law
This Agreement shall be governed, construed and interpreted in accordance with the laws of the State of Delaware, without giving effect to choice of law rules.
9. Acknowledgements.
The Parties acknowledge and agree that: (a) each has read and understands the terms and conditions stated in this Agreement; (b) each has had the opportunity to consult with independent counsel and that each has, in fact, availed itself of such right; (c) each is bound by the terms and conditions of this Agreement; (d) this Agreement is made, entered into and is effective as of the Effective Date; (e) that each Person signing on behalf of each Party has the requisite right, power and authority to execute this Agreement on behalf of said Party; and (f) each Party contributed to the drafting of this Agreement and as such, any ambiguity should not be construed in favor of or against one Party or the other.
10. Counterparts.
This Agreement and any amendment or supplement hereto may be executed in any number of counterparts, each of which shall be deemed an original, and all of which taken together shall constitute one and the same instrument. This Agreement shall become binding when any number of counterparts, individually or taken together, shall bear the signatures of both Parties. This Agreement may be executed and delivered by facsimile or any other electronic means, including “.pdf” or “.tiff” files, and any facsimile or other scanned copy of a signed copy of this Agreement shall constitute an original for all purposes.
11. Limitation on Liability.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, NEITHER PARTY TO THIS AGREEMENT SHALL BE LIABLE TO OR OTHERWISE RESPONSIBLE TO THE OTHER PARTY OR ANY AFFILIATE OF THE OTHER PARTY FOR LOST REVENUES OR PROFITS, OR INCIDENTAL, CONSEQUENTIAL, PUNITIVE, EXEMPLARY OR MULTIPLIED DAMAGES THAT ARISE OUT OF OR RELATE TO THIS AGREEMENT OR THE PERFORMANCE OR BREACH HEREOF OR THEREOF, EXCEPT (A) IN CONNECTION WITH THE INDEMNIFICATIONS OBLIGATIONS HEREIN OR (B) TO THE EXTENT THAT SUCH DAMAGES WERE ACTUALLY PAID TO A THIRD PARTY PURSUANT TO A THIRD PARTY CLAIM.
12. Entire Agreement.
This is the entire Agreement of the Parties, and there are no other outstanding Agreements, provisions, or Schedules on the subject matters not set forth herein. This Agreement may not be amended except by a writing signed by all Parties.
13. Representation.
Both Parties have had the opportunity to seek legal counsel regarding any and all aspects of this Agreement.
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IN WITNESS WHEREOF, the Parties have set their hands and seals as of the day and year first above written.
| ACORN ENERGY, INC. | ||
| By: | ||
| Jan H. Loeb, President and CEO | ||
| TRACY CLIFFORD CONSULTING, LLC | ||
| By: | ||
| Tracy Clifford, Member | ||
EXHIBIT 10.8
NONQUALIFIED OPTION AWARD AGREEMENT
Issued Pursuant to the Acorn Energy, Inc. Amended and Restated 2006 Stock Incentive Plan (as amended on February 5, 2019)
THIS OPTION AWARD AGREEMENT (“Agreement”), effective as of the date (the “Effective Date”) set forth in the Certificate to which this Agreement is attached (the “Certificate”), represents the grant of an incentive stock option (“Option”) by Acorn Energy, Inc., a Delaware corporation (the “Company”), to the person named in the Certificate (the “Participant”), subject to the terms and conditions set forth below and pursuant to the provisions of the Company’s Amended and Restated 2006 Stock Incentive Plan (the “Plan”). The Option granted hereby is intended to be an “NQSO” as such term is defined in the Plan and is not intended to be an “Incentive Option” as such term is defined in the Plan.
All capitalized terms used but not defined herein shall have the meanings ascribed to them in the Plan. The parties hereto agree as follows:
1. General Option Grant Information. The individual named in the Certificate has been selected to be a Participant in the Plan and receive an incentive stock option award as specified in the Certificate.
2. Grant of Option. The Company hereby grants to the Participant an Option to purchase the number of Shares set forth in the Certificate, exercisable at the stated Option Price, which is equal to or greater than one hundred percent (100%) of the Fair Market Value of a Share on the Grant Date specified in the Certificate, as determined in the manner and subject to the terms and conditions of the Plan and this Agreement.
3. Option Term. The term of this Option begins as of the Effective Date and continues through the Expiration Date as specified in the Certificate, unless sooner terminated in accordance with the terms of this Agreement. Notwithstanding any provision in this Agreement, in no event may the Option be exercised after the Expiration Date.
4. Vesting Period. (a) In General. Subject to the terms of this Agreement and the Plan, this Option shall vest and be exercisable as indicated in the Certificate. For the specified vesting to occur on any vesting date set forth therein, the Participant must be continuously employed by or serving as an Employee, Director or Third-Party Service Provider of the Company or any of its Affiliates from the Effective Date through such vesting date. Except as may otherwise be provided herein, if the Participant’s employment or service as an Employee, Director or Third-Party Service Provider terminates before the last vesting date set forth in the Certificate, the portion of the Option granted hereby that is unvested as of the date of termination shall be automatically forfeited.
(b) No Partial Vesting. Except as may be otherwise set forth herein or in the Plan, in no event shall the Participant have any rights to exercise any portion of the Option granted hereunder prior to the date such portion vests pursuant to the Vesting Schedule set forth in the Certificate.
(c) Change of Control. Notwithstanding the vesting schedule set forth in the Certificate, immediately prior to the occurrence of a Change of Control (as defined in the following sentence), the vesting of the Option shall immediately be accelerated so that the Option shall be deemed to be fully vested and exercisable. “Change of Control” means the first occurrence of any of the following: (1) the acquisition by any entity or natural person, or a group of entities and/or natural persons acting together, of a majority of the equity interests of the Company, OMX Holdings, Inc. or OmniMetrix, whether through purchase, merger, stock swap, or any similar deal structure; and (2) the sale or other disposition of all or substantially all the assets of the Company, OMX Holdings, Inc. or OmniMetrix.
5. Exercise. The Participant, or the Participant’s representative upon the Participant’s death or disability, may exercise this Option at any time prior to the termination of the Option, subject to and as provided in Sections 3 and 8.
6. How to Exercise. This Option shall be exercised by written notice to the Committee or such other administrator appointed by the Committee, specifying the number of Shares subject to this Option Participant desires to exercise. The Option Price for the number of Shares with respect to which this Option is being exercised shall be payable to the Company in full: (a) in cash or its equivalent, (b) by cashless (broker-assisted) exercise; (c) by tendering (either by actual delivery or attestation) previously acquired Shares having an aggregate Fair Market Value at the time of exercise equal to the Option Price (provided that except as otherwise determined by the Committee, the Shares that are tendered must have been held by the Participant for at least six months prior to their tender to satisfy the Option Price or have been purchased on the open market) or (d) by any other method approved or accepted by the Committee in its sole discretion, including, without limitation, net exercise. In no event may the Option be exercised for a fraction of a share.
Notwithstanding anything to the contrary set forth herein or in the Plan, in the event that the Participant has not fully exercised this Option at the end of the term of this Option and the exercise price of this Option is less than the Fair Market Value of the Shares, the entire outstanding Option shall automatically be deemed exercised and settled on the expiration date by Net Exercise with no further action by the Participant.
Unless otherwise determined by the Committee, all cash payments under all of the methods indicated above shall be paid in United States dollars.
7. Nontransferability. This Option may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution, and may be exercised during Participant’s lifetime only by the Participant or his or her guardian or legal representative. No assignment or transfer of this Option in violation of this Section 8, whether voluntary or involuntary, by operation of law or otherwise, except by will or the laws of descent and distribution or as otherwise required by applicable law, shall vest in the assignee or transferee any interest whatsoever.
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8. Termination of Option. (a) Termination for Cause. Except as may otherwise be provided in a written agreement between the Company (or any Affiliate) and Participant, in the event of the termination of the Participant’s service as an Employee, Director or Third Party Service Provider for “cause”, this Option and all rights granted hereunder shall be forfeited and deemed cancelled and no longer exercisable on the date of such termination, unless the Committee determines otherwise. For purposes of this Agreement, the term “cause” shall have the meaning set forth in any employment, consulting or similar agreement between the Company (or any Affiliate) and the Participant or, in the event there is no such agreement (or if any such agreement does not contain a definition of “cause”), the term “cause” shall mean (i) Participant’s conviction of, guilty or no contest plea to, or confession of guilt of, any felony or other crime involving moral turpitude, (ii) an act or omission by Participant in connection with Participant’s employment with or service to the Company or its Affiliates that constitutes fraud, criminal conduct, breach of fiduciary duty, dishonesty, gross negligence, malfeasance or willful misconduct, in each case, which the Company determines in good faith to be materially harmful or detrimental to the Company or (iii) material breach by Participant of any agreement with the Company or its Affiliates or continuing failure by Participant to perform such duties as are properly assigned to Participant, in each case, if curable, after having failed to cure the same within 30 days following notice from the Company. Any determination of “cause” shall be made in the sole good faith discretion of the Committee.
(b) Termination Without Cause. Unless otherwise determined by the Committee, in the event of the termination of the Participant’s service as an Employee, Director or Third Party Service Provider other than for cause or other than as a result of the Participant’s death or disability, this Option and all rights granted hereunder shall be forfeited and deemed cancelled and no longer exercisable on the day which is 18 months after the date of such termination.
(c) Death. In the event the Participant dies while serving as an Employee, Director or Third Party Service Provider, the Option to the extent not previously expired or exercised shall, to the extent vested and exercisable on the date of death, be exercisable by the estate of such Participant or by any person who acquired such Option by bequest or inheritance, or by the Permitted Assignee, at any time within 18 months after the death of the Participant, unless earlier terminated pursuant to its terms.
(d) Disability. In the event the Participant ceases to perform services of any kind (whether as an Employee, Director or Third Party Service Provider) for the Company or any of its Subsidiaries or Affiliates due to permanent and total disability, the Participant, or his guardian or legal representative, or a Permitted Assignee, shall have the unqualified right to exercise the vested portion of the Option, to the extent not previously exercised or expired, as of the first date of permanent and total disability (as determined in the sole discretion of the Committee), at any time within 18 months after the first date of permanent and total disability, unless earlier terminated pursuant to its terms. For purposes of this Agreement, the term “permanent and total disability” means the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months, and the permanence and degree of which shall be supported by medical evidence satisfactory to the Committee. Notwithstanding anything to the contrary set forth herein, the Committee shall determine, in its sole and absolute discretion, (i) whether the Participant has ceased to perform services of any kind due to a permanent and total disability and, if so, (ii) the first date of such permanent and total disability.
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9. Administration. This Agreement and the rights of the Participant hereunder and under the Certificate are subject to all the terms and conditions of the Plan, as the same may be amended from time to time, as well as to such rules and regulations as the Committee may adopt for administration of the Plan. It is expressly understood that the Committee is authorized to administer, construe, and make all determinations necessary or appropriate to the administration of the Plan, this Agreement and the Certificate, all of which shall be binding upon the Participant. Any inconsistency between the Agreement or the Certificate (on the one hand) and the Plan (on the other hand) shall be resolved in favor of the Plan.
10. Reservation of Shares. The Company hereby agrees that at all times there shall be reserved for issuance and/or delivery upon exercise of this Option such number of Shares as shall be required for issuance or delivery upon exercise hereof.
11. Adjustments. The terms of this Option, including the number and kind of underlying shares as well as the Option Price, shall be subject to adjustment under the circumstances and in accordance with the provisions of Section 4.4 and 17.2 of the Plan. This Option is also subject to cancellation under the circumstances and in accordance with the provisions of Section 4.4 of the Plan.
12. Amendment. Except to the extent necessary to avoid the imposition of additional tax and/or interest under Section 409A of the Code with respect to Awards that are treated as nonqualified deferred compensation, no termination, amendment, suspension, or modification of the Plan or this Agreement shall adversely affect in any material way the Option granted under this Agreement without the written consent of the Participant holding such Options. Notwithstanding the foregoing, the Committee may make adjustments to the Option granted under this Agreement to take account of certain events as contemplated by Sections 4.4 and 17.2 of the Plan.
13. Notices. Any notice which either party hereto may be required or permitted to give to the other shall be in writing, and may be delivered personally or by mail, postage prepaid, or overnight courier, addressed as follows: if to the Company, at its office at 3903 Centerville Road, Wilmington, Delaware 19807, Attn: Michael Barth, CFO, or at such other address as the Company by notice to the Participant may designate in writing from time to time; and if to the Participant, at the address shown below his or her signature on the Certificate, or at such other address as the Participant by notice to the Company may designate in writing from time to time. Notices shall be effective upon receipt.
14. Withholding Taxes. The Company shall have the right to withhold from wages or other amounts otherwise payable to the Participant (or a Permitted Assignee thereof), or otherwise require such Participant or Permitted Assignee to pay, any Withholding Taxes arising as a result of (i) the grant or exercise of this Option, or any other taxable event occurring pursuant to the Plan, this Agreement or the Certificate or (ii) a Disqualifying Disposition of Shares. If, notwithstanding the foregoing, the Participant (or a Permitted Assignee thereof) shall fail to actually or constructively make such tax payments as are required, the Company (or its Affiliates or Subsidiaries) shall, to the extent permitted by law, have the right to deduct any such Withholding Taxes from any payment of any kind otherwise due to such Participant or to take such other action as may be necessary to satisfy such Withholding Taxes. In satisfaction of the requirement to pay Withholding Taxes, the Participant (or Permitted Assignee) may make a written election, which may be accepted or rejected in the discretion of the Committee, (i) to have withheld a portion of any Shares or other payments then issuable to the Participant (or Permitted Assignee) pursuant to any Award, or (ii) to tender other Shares to the Company (either by actual delivery or attestation, in the sole discretion of the Committee, provided that, except as otherwise determined by the Committee, the Shares that are tendered must have been held by the Participant for at least six (6) months prior to their tender to satisfy the Option Price or have been purchased on the open market), in either case having an aggregate Fair Market Value equal to the Withholding Taxes.
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15. Registration; Legend. The Company may postpone the issuance and delivery of Shares upon any exercise of this Option until (a) the admission of such Shares to listing on any stock exchange or exchanges on which Shares of the Company of the same class are then listed and (b) the completion of such registration or other qualification of such Shares under any state or federal law, rule or regulation as the Company shall determine to be necessary or advisable. The Participant shall make such representations and furnish such information as may, in the opinion of counsel for the Company, be appropriate to permit the Company, in light of the then existence or non-existence with respect to such Shares of an effective Registration Statement under the Securities Act of 1933, as amended, to issue the Shares in compliance with the provisions of that or any comparable act.
The Company may cause the following or a similar legend to be set forth on each certificate representing Shares or any other security issued or issuable upon exercise of this Option unless counsel for the Company is of the opinion as to any such certificate that such legend is unnecessary:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT, THE AVAILABILITY OF WHICH IS ESTABLISHED BY AN OPINION FROM COUNSEL TO THE COMPANY.
16. Miscellaneous. (a) Neither this Agreement nor the Certificate shall confer upon the Participant any right to continuation of employment by the Company, nor shall this Agreement interfere in any way with the Company’s right to terminate the Participant’s employment at any time.
(b) The Participant shall have no rights as a stockholder of the Company with respect to the Shares subject to this Agreement until such time as the purchase price has been paid, and the Shares have been issued and delivered to the Participant.
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(c) This Agreement and the Certificate shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.
(d)To the extent not preempted by federal law, this Agreement and the Certificate shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to the principles of conflicts of law which might otherwise apply. The Participant submits to the exclusive jurisdiction and venue of the federal or state courts of New York, as determined by the Company in its sole discretion, to resolve any and all issues that may arise out of or relate to the Plan, this Agreement or the Certificate.
(e) All obligations of the Company under the Plan, this Agreement and the Certificate with respect to this Option shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.
(f) The provisions of this Agreement and the Certificate are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.
(g) By accepting this Award or other benefit under the Plan, the Participant and each person claiming under or through the Participant shall be conclusively deemed to have indicated their acceptance and ratification of, and consent to, any action taken under the Plan by the Company, the Board or the Committee.
(h) The Participant, every person claiming under or through the Participant, and the Company hereby waives to the fullest extent permitted by applicable law any right to a trial by jury with respect to any litigation directly or indirectly arising out of, under, or in connection with the Plan, this Agreement or the Certificate.
17. Exculpation. This Option and all documents, agreements, understandings and arrangements relating hereto have been issued on behalf of the Company by officers acting on its behalf, and not by any person individually. None of the Directors, officers or stockholders of the Company, nor the directors, officers or stockholders of any subsidiary or affiliate of the Company, shall be bound or have any personal liability hereunder. Each party hereto shall look solely to the assets of the Company for satisfaction of any liability of the Company in respect of this Option and all documents, agreements, understanding and arrangements relating hereto and will not seek recourse or commence any action against any of the Directors, officers or stockholders of the Company or any of the directors, officers or stockholders of any subsidiary or affiliate of the Company, or any of their personal assets for the performance or payment of any obligation hereunder or thereunder. The foregoing shall also apply to any future documents, agreements, understandings, arrangements and transactions between the parties hereto.
18. Captions. The captions in this Agreement are for convenience of reference only, and are not intended to narrow, limit or affect the substance or interpretation of the provisions contained herein.
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EXHIBIT 19.1
ACORN ENERGY, INC.
INSIDER TRADING POLICY
Section 1. Individuals and Entities Subject to this Policy
This Insider Trading Policy (the “Policy”) applies to all of the following individuals and entities (“Covered Persons”):
● employees of Acorn Energy, Inc., and/or its subsidiaries (the “Company”),
● Company directors and officers,
● contractors and consultants of the Company,
● their family members, and
● other entities over which such individuals have or share voting or investment control.
This Policy also applies to any other person who receives material nonpublic information (“MNPI”) from any person subject to this Policy or is otherwise designated by the Compliance Officer. Some examples of MNPI include internal estimates of earnings which differ significantly from analysts estimates, merger or acquisition negotiations, securities offerings, significant developments relating to a major contract, significant new products, changes in key management personnel or positions, upcoming announcements of earnings or losses, the sale of significant assets or a significant subsidiary, and the gain or loss of a substantial customer or supplier. If a Covered Person is unsure whether information they have received is MNPI, they should contact the Compliance Officer for assistance. Please see Section 14 below for a more detailed definition of MNPI.
This Policy continues to apply following termination of employment or other relationship with the Company until 9 a.m. ET on the morning of the third full trading day after any MNPI in your possession has become public or is no longer material. Each employee, officer, consultant, contractor and director is personally responsible for the actions of their family members and other persons with whom they have a relationship who are subject to this Policy, including any pre-clearances required.
For purposes of this Policy, “family members” include people who live with you, or are financially dependent on you, and also include those whose transactions in securities are directed by you or are subject to your influence or control.
Section 2. Trading in Company Securities While in Possession of MNPI is Prohibited
The purchase or sale of securities by any person who possesses MNPI is a violation of U.S. federal and state securities laws. It is important to avoid the appearance, as well as the fact, of trading based on MNPI.
No Covered Person who is aware of MNPI relating to the Company may, directly or indirectly (through family members, other persons, entities or otherwise):
● buy, sell, or otherwise trade in the securities of the Company,
● advise anyone else to buy, sell, or otherwise trade in the securities of the Company; or
● otherwise engage in any action to take personal advantage of that information.
For purposes of this Policy, the term “trade” includes any transaction in Company securities, including purchases, sales, gifts and pledges.
You may be required to forego a proposed transaction even if you planned to make the transaction before learning the MNPI (even though you may suffer economic loss or forego anticipated profit by waiting).
Section 3. Trades May Not Occur During Blackout Periods
Employees at or above the Vice President level (“Officers”), Company directors (“Directors”) (Directors and Officers collectively referred to as “Company Insiders”) and the employees listed on Exhibit A (collectively with Company Insiders referred to as “Restricted Persons”) of the Company are prohibited from trading in the Company’s securities during quarterly blackout periods, as defined below, and event-specific blackout periods that may apply to any employee from time to time.
A. Quarterly Blackout Periods: Trading in the Company’s securities is prohibited by Restricted Persons during the period beginning on the twentieth (20th) day of the last month of each of the Company’s fiscal quarters and ending at 9 a.m. ET on the morning of the second full trading day following the filing by the Company of its financial results in a Form 10-Q or Form 10-K (as applicable) covering the relevant fiscal quarter.
B. Event-Specific Blackout Periods: From time to time, other types of MNPI regarding the Company (such as negotiation of mergers, acquisitions, or dispositions, investigation and assessment of cybersecurity incidents or new product developments) may be pending and not be publicly disclosed. While such MNPI is pending, the Company may designate certain other employees (in addition to Company Insiders and the employees listed on Exhibit A) as Restricted Persons and may impose special event-specific blackout periods during which Restricted Persons are prohibited from trading in the Company’s securities. If the Company imposes an event-specific blackout period, it will notify the Restricted Persons affected and such Restricted Persons may not trade in the Company’s securities so long as the event remains material and nonpublic. Restricted Persons will be notified when the event-specific blackout period has been lifted.
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Section 4. Restricted Persons
The Compliance Officer will review, at least annually, those categories of individuals identified in Exhibit A as Restricted Persons. Generally, Restricted Persons shall include any person who by function of their employment is consistently in possession of MNPI or performs an operational role, such as head of a division or business unit, that is material to the Company as a whole.
Section 5. Trading in Other Public Companies’ Securities While in Possession of MNPI is Prohibited
No Covered Person who possesses MNPI relating to other companies, including our vendors, customers and partners, as a result of employment with the Company or the performance of services on our behalf, may, directly or indirectly (through family members, other persons, entities or otherwise) buy or sell securities of (or obtain or dispose of any other interest in) such companies, or advise anyone else to do so, or otherwise engage in any action to take personal advantage of that information.
Section 6. Certain Types of Transactions Are Prohibited
A. All Covered Persons are prohibited from engaging in the following transactions in the Company’s securities unless advance approval is obtained from the Compliance Officer:
1. Short Sales. Short sales of Company securities are prohibited, as short sales evidence the seller’s expectation that Company securities will decline in value, signal to the market that the seller has no confidence in the Company or its short-term prospects, and may reduce the seller’s incentive to improve Company performance. In addition, Section 16(c) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), prohibits directors and officers from engaging in short sales.
2. Publicly Traded Options. Transactions in puts, calls or other derivative securities involving Company stock are prohibited, as any such transaction is, in effect, a bet on the short-term movement of the Company’s stock, creates the appearance of trading based on inside information, and may focus attention on short-term performance at the expense of Company long-term objectives.
3. Hedging Transactions. Hedging or monetization transactions (including but not limited to zero-cost collars, prepaid variable forwards, equity swaps, puts, calls, collars, forwards and other derivative instruments) are prohibited, as such transactions allow you to continue to own Company securities without the full risks and rewards of ownership and as a result, you may not have the same objectives as other stockholders.
4. Margin Accounts and Pledges. All Covered Persons are prohibited from holding Company securities in a margin account or pledging Company securities as collateral for a loan, as such securities may be traded without your consent (for failing to meet a margin call or if you default on the loan) at a time when you possess MNPI or otherwise are not permitted to trade. However, in the case of a pledge to collateralize a loan unrelated to securities trading, such as a home loan, the Compliance Officer may pre-clear the proposed pledge in limited circumstances upon concluding the transaction does not misuse MNPI.
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B. In addition, Company Insiders are also subject to the following restrictions:
1. Short-Term Trading. Company Insiders who purchase Company securities in the open market may not sell any Company securities of the same class during the six months following the purchase (or vice versa), as short-term trading of the Company’s securities may be distracting and may unduly focus the person on short-term stock market performance, instead of the Company’s long-term business objectives, and may result in the disgorgement of any short swing profits.
2. Certain Retirement Plan Trading. Company Insiders are prohibited from trading in the Company’s equity securities during a blackout period imposed under an “individual account” retirement or pension plan of the Company during which at least 50% of the plan participants are unable to purchase, sell, or otherwise acquire or transfer an interest in equity securities of the Company, due to a temporary suspension of trading by the Company or the plan fiduciary.
Section 7. Sharing MNPI is Prohibited
No Covered Person who possesses MNPI relating to the Company or any other companies may directly or indirectly (through family members, other persons, entities or otherwise) pass that information on to others outside the Company, including friends, family, or other acquaintances (referred to as “tipping”) until such information has been disseminated to the public. You must treat MNPI about our business partners with the same care required with respect to such information related directly to the Company.
Tipping includes passing information under circumstances that could suggest that you were trying to help another profit or avoid a loss. Exercise care when speaking with others who do not “need to know”, even if they are subject to this Policy, as well as when communicating with family, friends and others not associated with the Company. To avoid the appearance of impropriety, refrain from discussing our business or prospects or making recommendations about buying or selling our securities or the securities of other companies with which we have a relationship. Inquiries about the Company should be directed to our Compliance Officer.
Section 8. Recommendations Regarding Trading in Company Securities are Prohibited
No Covered Person may make recommendations or express opinions on trading in Company securities while in possession of MNPI, except to advise others not to trade in Company securities if doing so might violate the law or this Policy.
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Section 9. Only Designated Company Spokespersons are Authorized to Disclose MNPI (Reg FD)
U.S. federal securities laws, including Regulation Fair Disclosure, prohibit the Company from selectively disclosing MNPI. The Company has established procedures for designated spokespersons to release MNPI in a manner that is designed to achieve broad dissemination of the information immediately upon its release. Employees must follow the Company’s established disclosure procedures, which among other things prohibit employees from in any manner disclosing MNPI to anyone outside the Company, including family members and friends, and including social media or electronic communications.
Section 10. Other Transactions in Company Securities
A. General Rule. This Policy applies to all transactions in Company securities, including any securities the Company may issue from time to time, such as preferred stock, warrants and convertible debentures, as well as to derivative securities relating to the Company’s stock, whether or not issued by Company, such as exchange-traded options.
B. Exceptions.
1. Employee Benefit Plans.
a. Equity Incentive Plans. The trading restrictions set forth in this Policy do not apply to the exercise of stock options or other equity awards if exercised by cash payment of the exercise price or via net exercise, but do apply to all sales of securities to pay the exercise price or associated tax withholding, including a “same-day sale” of shares received on exercise of options to pay the exercise price (sometimes called a “cashless exercise”) or applicable tax withholding. These restrictions also apply to the same-day sale of shares received on the settlement of restricted stock units or similar awards to cover applicable tax withholding.
b. Employee Stock Purchase Plans. The trading restrictions set forth in this Policy do not apply to purchases of Company securities pursuant to the employee’s advance instructions under employee stock purchase plans or employee benefit plans (e.g., a pension or 401(k) plan). However, no alteration to instructions regarding the level of withholding or the purchase of Company securities in such plans is permitted while in the possession of MNPI. Any sale of securities acquired under such plans remains subject to the prohibitions and restrictions of this Policy.
c. Rule 10b5-1 Trading Plans (“10b5-1 Plans”). The trading restrictions set forth in this Policy do not apply to sales of Company securities pursuant to a compliant 10b5-1 Plan.
Section 11. Company Insiders Are Subject to Additional Restrictions
A. Section 16 Insiders. Company Insiders are subject to the reporting provisions and trading restrictions of Section 16 of the Exchange Act and the underlying rules and regulations promulgated by the SEC. The Company’s legal counsel must be advised of a Company Insider’s intent to enter into any transaction involving Company securities at least 48 hours prior to effecting the planned transaction so that counsel can pre-clear the transaction. Almost all transactions by Company Insiders involving Company securities must be reported to the SEC by the end of the second business day following the transaction. As a result, it is essential that all transactions be pre-cleared.
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B. 10b5-1 Plans for Company Insiders. Rule 10b5-1 provides an affirmative defense against insider trading liability under Rule 10b-5. To be eligible for this defense, a Company Insider may enter into a 10b5-1 Plan for trading in Company securities. If the plan meets the requirements of Rule 10b5-1, Company securities may be purchased or sold without regard to certain insider trading restrictions. To comply with this Policy, a 10b5-1 Plan must be pre-approved by the Company’s legal counsel and meet the requirements of Rule 10b5-1. The Company expects that 10b5-1 Plans will be used only in limited circumstances where there is a demonstrated need for such a plan. In general, a 10b5-1 Plan must be entered into at a time when the Company Insider is not aware of any MNPI. Once the 10b5-1 Plan is adopted, the Company Insider must not exercise any influence over the amount of securities to be traded, the price at which they are to be traded or the date of the trade. The 10b5-1 Plan must either specify the amount, pricing and timing of transactions in advance or delegate discretion on these matters to an independent third party.
Section 12. Policy Violations Must Be Reported
Any person who violates this Policy or any federal or state laws governing insider trading, or knows of any such violation by any other person, must report the violation immediately to the Compliance Officer. Upon learning of any such violation, the Compliance Officer will determine whether the Company should release any MNPI or whether the Company should report the violation to the SEC or other appropriate governmental authority.
Section 13. Insider Trading Compliance Officers
The Company’s Chief Financial Officer shall act as the Company’s Insider Trading Compliance Officer (the “Compliance Officer”); provided, however, that if the Chief Financial Officer is a party to a proposed trade, transaction or inquiry relating to this Policy, the Company’s Chief Executive Officer shall act as the Compliance Officer with respect to such proposed trade, transaction or inquiry. The Compliance Officer may delegate his or her authority to act as the Compliance Officer as he or she deems necessary or appropriate in his or her sole discretion. The duties and powers of the Compliance Officer and his or her delegees may include the following:
● Administering, monitoring and enforcing compliance with this Policy.
● Pre-clearing trading in securities and 10b5-1 Plans of Company Insiders.
● Responding to all inquiries relating to this Policy.
● Designating and announcing special (e.g., event specific) trading blackout periods during which specified persons may not trade in Company securities.
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● Providing copies of this Policy and other appropriate materials to all current and new directors, officers and employees, and such other persons as the Compliance Officer determines have access to MNPI concerning the Company.
● Administering, monitoring and enforcing compliance with federal and state insider trading laws and regulations.
● Assisting in the preparation and filing of all required SEC reports filed by Company Insiders relating to their trading in Company securities, including Forms 3, 4, 5 and 144 and Schedules 13D and 13G.
● Maintaining as Company records originals or copies of all documents required by the provisions of this Policy, and copies of all required SEC reports relating to insider trading, including Forms 3, 4, 5 and 144 and Schedules 13D and 13G.
● Revising this Policy as necessary to reflect changes in applicable insider trading laws and regulations.
● Maintaining the accuracy of the list of roles/titles as set forth on Exhibit A, and updating such list periodically as necessary to reflect additions or deletions.
● Designing and requiring training about the obligations of this Policy as the Compliance Officer considers appropriate.
The Compliance Officer may designate one or more individuals who may perform the Compliance Officer’s duties under this Policy in the event that a Compliance Officer is unable or unavailable to perform such duties.
If you have any questions regarding provisions of this Policy, please contact the Compliance Officer using: tclifford@acornenergy.com
Section 14. Definition of “Material Nonpublic Information” (MNPI)
A. “Material”. Information about the Company is “material” if it would be expected to affect the investment or voting decisions of a reasonable investor, or if the disclosure of the information would be expected to significantly alter the total mix of the information in the marketplace about the Company. Any type of information that could reasonably be expected to affect the market price of Company securities or an investor’s decision to buy or sell Company securities is material. Both positive and negative information may be material. While it is not possible to identify all information that would be deemed material, the following information ordinarily would be considered material:
● Financial performance, including operating results and changes in performance or liquidity.
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● Projections of future earnings or losses, or other earnings guidance, and any changes to previously announced earnings guidance.
● Company projections and strategic plans.
● New major contracts, suppliers, or finance sources or the loss thereof.
● Development or release of a significant new product or service.
● Significant pricing or cost changes.
● Potential mergers or acquisitions, the sale of Company assets or subsidiaries or major partnering agreements.
● Changes in senior management or the Board of Directors.
● Stock splits, public or private securities/debt offerings, or changes in Company dividend policies or amounts.
● A significant cybersecurity incident, such as a data breach or a significant disruption or unauthorized access to information technology infrastructure.
● Actual or threatened major litigation, or the resolution of such litigation.
B. “Nonpublic”. Material information is “nonpublic” if it has not been widely disseminated to the general public through a report filed with the SEC or through major newswire services, national news services or financial news services. For purposes of this Policy, information will be considered public after the close of trading on the second full trading day following the Company’s widespread public release of the information.
C. Consult Compliance Officer When in Doubt. Any employees who are unsure whether the information that they possess is material or nonpublic must consult the Compliance Officer for guidance before trading in any Company securities.
Section 15. Violations of Insider Trading Laws or This Policy Can Result in Severe Consequences
A. Civil and Criminal Penalties. The consequences of prohibited insider trading or tipping can be severe. Persons violating insider trading or tipping rules may be required to disgorge profit made or loss avoided, pay civil penalties up to three times the profit made or loss avoided, face private action for damages, as well as be subject to criminal penalties, including imprisonment and significant fines. The Company and/or the supervisors of the person violating the rules may also be required to pay major civil or criminal penalties.
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B. Company Discipline. Violation of this Policy or federal or state insider trading laws by any director, officer or employee may subject the director to removal proceedings and the officer or employee to disciplinary action by the Company, including termination for cause.
Section 16. This Policy Is Subject to Revision
The Company may change the terms of this Policy from time to time to respond to developments in law and practice, and will take steps to inform all affected persons of any material changes.
Section 17. All Persons Must Acknowledge Their Agreement to Comply with This Policy
This Policy will be available on the Company’s website and delivered to all persons subject to this Policy upon adoption or the commencement of their employment or other service relationship with the Company. Upon first receiving a copy of this Policy, each such person must sign an acknowledgment that he or she has received a copy of and agrees to comply with this Policy. The Compliance Officer may periodically require written certifications by those subject to this Policy, including as to their compliance with this Policy or to refresh their acknowledgement of and agreement to comply with this Policy. Any acknowledgment and agreement hereunder will constitute consent for the Company to impose sanctions for violation of this Policy and to issue any necessary stop-transfer orders to the Company’s transfer agent to enforce compliance with this Policy.
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EXHIBIT A
[Company employees to be included as Restricted Persons]
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Exhibit 21.1
SUBSIDIARIES OF THE REGISTRANT
| Subsidiary | Jurisdiction | |
| OMX Holdings, Inc. | Georgia | |
| OmniMetrix, LLC | Georgia |
EXHIBIT 23.1
consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-140539, 333-158287 and 333-169438) of our report dated March 5, 2026, with respect to the consolidated financial statements of Acorn Energy, Inc. included in this Annual Report on Form 10-K for the year ended December 31, 2025.
/s/ CBIZ CPAs P.C.
Marlton, New Jersey
March 5, 2026
EXHIBIT 23.2
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-140539, 333-158287 and 333-169438) of our report dated March 6, 2025, with respect to the consolidated financial statements of Acorn Energy, Inc. included in this Annual Report on Form 10-K for the year ended December 31, 2025.
/s/ Marcum LLP
Marlton, New Jersey
March 5, 2026
Exhibit 31.1
I, Jan H. Loeb, the Chief Executive Officer of Acorn Energy, Inc., certify that:
| 1. | I have reviewed this report on Form 10-K of Acorn Energy, Inc.; | |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Dated: March 5, 2026 | ||
| By: | /s/ JAN H. LOEB | |
| Jan H. Loeb | ||
| Chief Executive Officer | ||
Exhibit 31.2
I, Tracy S. Clifford, the Chief Financial Officer of Acorn Energy, Inc., certify that:
| 1. | I have reviewed this report on Form 10-K of Acorn Energy, Inc.; | |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Dated: March 5, 2026 | ||
| By: | /s/ Tracy S. Clifford | |
| Tracy S. Clifford | ||
| Chief Financial Officer | ||
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report on Form 10-K of Acorn Energy, Inc. (the “Company”) for the fiscal year ended December 31, 2025, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jan H. Loeb, Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
| /s/ Jan H. Loeb | |
| Jan H. Loeb | |
| Chief Executive Officer | |
| March 5, 2026 |
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report on Form 10-K of Acorn Energy, Inc. (the “Company”) for the fiscal year ended December 31, 2025, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Tracy S. Clifford, Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
| /s/ Tracy S. Clifford | |
| Tracy S. Clifford | |
| Chief Financial Officer | |
| March 5, 2026 |
EXHIBIT 97.1
ACORN ENERGY, INC.
CLAWBACK POLICY
Introduction
The Board of Directors (the “Board”) of Acorn Energy, Inc. (the “Company”) believes that it is in the best interests of the Company and its shareholders to create and maintain a culture that emphasizes integrity and accountability and that reinforces the Company’s pay-for-performance compensation philosophy. The Board has therefore adopted this policy which provides for the recoupment of certain executive compensation in the event of an accounting restatement resulting from material noncompliance with financial reporting requirements under the federal securities laws (the “Policy”). This Policy is designed to comply with Section 10D of the Securities Exchange Act of 1934 (the “Exchange Act”) and Nasdaq Listing Rule 5608 (the “Clawback Listing Standards”).
Administration
This Policy shall be administered by the Board or, if so designated by the Board, the Compensation Committee, in which case references herein to the Board shall be deemed references to the Compensation Committee. Any determinations made by the Board shall be final and binding on all affected individuals.
Covered Executives
This Policy applies to the Company’s current and former executive officers, as determined by the Board in accordance with the definition in Section 10D of the Exchange Act and the Clawback Listing Standards, and such other senior executives/employees who may from time to time be deemed subject to the Policy by the Board (“Covered Executives”).
Recoupment; Accounting Restatement
In the event the Company is required to prepare an accounting restatement of its financial statements due to the Company’s material noncompliance with any financial reporting requirement under the securities laws, including any required accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period, the Board will require reimbursement or forfeiture of any excess Incentive Compensation (as defined below) received by any Covered Executive during the three completed fiscal years immediately preceding the date on which the Company is required to prepare an accounting restatement.
Incentive Compensation
For purposes of this Policy, Incentive Compensation means any of the following; provided that, such compensation is granted, earned, or vested based wholly or in part on the attainment of a financial reporting measure:
| ● | Annual bonuses and other short- and long-term cash incentives. | |
| ● | Stock options. |
| ● | Stock appreciation rights. | |
| ● | Restricted stock. | |
| ● | Restricted stock units. | |
| ● | Performance shares. | |
| ● | Performance units. |
Financial reporting measures include:
| ● | Company stock price. | |
| ● | Total shareholder return. | |
| ● | Revenues. | |
| ● | Net income. | |
| ● | Earnings before interest, taxes, depreciation, and amortization (EBITDA). | |
| ● | Liquidity measures such as working capital or operating cash flow. | |
| ● | Return measures such as return on invested capital or return on assets. | |
| ● | Earnings measures such as earnings per share. |
Excess Incentive Compensation: Amount Subject to Recovery
The amount to be recovered will be the excess of the Incentive Compensation paid to the Covered Executive based on the erroneous data over the Incentive Compensation that would have been paid to the Covered Executive had it been based on the restated results, as determined by the Board, without regard to any taxes paid by the Covered Executive in respect of the Incentive Compensation paid based on the erroneous data.
If the Board cannot determine the amount of excess Incentive Compensation received by the Covered Executive directly from the information in the accounting restatement, then it will make its determination based on a reasonable estimate of the effect of the accounting restatement.
Method of Recoupment
The Board will determine, in its sole discretion, the method for recouping Incentive Compensation hereunder which may include, without limitation:
(a) requiring reimbursement of cash Incentive Compensation previously paid;
(b) seeking recovery of any gain realized on the vesting, exercise, settlement, sale, transfer, or other disposition of any equity-based awards;
(c) offsetting the recouped amount from any compensation otherwise owed by the Company to the Covered Executive;
(d) cancelling outstanding vested or unvested equity awards; and/or
(e) taking any other remedial and recovery action permitted by law, as determined by the Board.
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No Indemnification
The Company shall not indemnify any Covered Executives against the loss of any incorrectly awarded Incentive Compensation.
Interpretation
The Board is authorized to interpret and construe this Policy and to make all determinations necessary, appropriate, or advisable for the administration of this Policy. It is intended that this Policy be interpreted in a manner that is consistent with the requirements of Section 10D of the Exchange Act, any applicable rules or standards adopted by the Securities and Exchange Commission, and the Clawback Listing Standards.
Effective Date
This Policy shall be effective as of the date it is adopted by the Board (the “Effective Date”) and shall apply to Incentive Compensation that is received by Covered Executives on or after the Effective Date, even if such Incentive Compensation was approved, awarded, or granted to Covered Executives prior to the Effective Date.
Amendment; Termination
The Board may amend this Policy from time to time in its discretion and shall amend this Policy as it deems necessary to reflect any regulations adopted by the Securities and Exchange Commission under Section 10D of the Exchange Act and to comply with the Clawback Listing Standards and any other rules or standards adopted by a national securities exchange on which the Company’s securities are listed. The Board may terminate this Policy at any time.
Other Recoupment Rights
Any right of recoupment under this Policy is in addition to, and not in lieu of, any other remedies or rights of recoupment that may be available to the Company pursuant to the terms of any similar policy in any employment agreement, equity award agreement, or similar agreement and any other legal remedies available to the Company.
Relationship to Other Plans and Agreements
The Board intends that this Policy will be applied to the fullest extent of the law. The Board may require that any employment agreement, equity award agreement, or similar agreement entered into on or after the Effective Date shall, as a condition to the grant of any benefit thereunder, require a Covered Executive to agree to abide by the terms of this Policy. In the event of any inconsistency between the terms of the Policy and the terms of any employment agreement, equity award agreement, or similar agreement under which Incentive Compensation has been granted, awarded, earned or paid to a Covered Executive, whether or not deferred, the terms of the Policy shall govern.
Acknowledgment
The Covered Executive shall sign an acknowledgment form in the form attached hereto as Exhibit A in which they acknowledge that they have read and understand the terms of the Policy and are bound by the Policy.
Impracticability
The Board shall recover any excess Incentive Compensation in accordance with this Policy unless such recovery would be impracticable, as determined by the Board in accordance with Rule 10D-1 of the Exchange Act and the listing standards of the national securities exchange on which the Company’s securities are listed.
Successors
This Policy shall be binding and enforceable against all Covered Executives and their beneficiaries, heirs, executors, administrators or other legal representatives.
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EXHIBIT A
ACORN ENERGY, INC.
CLAWBACK POLICY ACKNOWLEDGMENT
The Board of Directors of Acorn Energy, Inc. (the “Company”) has adopted the Acorn Energy, Inc. Clawback Policy (the “Clawback Policy”) which is applicable to the Company’s Covered Executives.
I, the undersigned, acknowledge that I have received a copy of the Clawback Policy, as it may be amended, restated, supplemented or modified from time to time, and that I have read it, understand it, and acknowledge that I am fully bound by, and subject to, all of the terms and conditions thereof.
In the event of any inconsistency between the terms of the Clawback Policy and the terms of any employment agreement, equity award agreement, or similar agreement under which Incentive Compensation has been granted, awarded, earned or paid to me, whether or not deferred, the terms of the Clawback Policy shall govern.
If the Company’s Board of Directors determines that any Incentive Compensation I have received must be forfeited, repaid, or otherwise recovered by the Company, I shall promptly take whatever action is necessary to effectuate such forfeiture, repayment, or recovery.
I acknowledge that I am not entitled to indemnification in connection with the Company’s enforcement of the Clawback Policy.
I understand that any delay or failure by the Company to enforce any requirement contained in the Clawback Policy will not constitute a waiver of the Company’s right to do so in the future.
Any capitalized terms used in this Acknowledgment that are not otherwise defined shall have the meaning ascribed to them in the Clawback Policy.
| (Executive’s Signature) | |
| (Executive’s Printed Name) | |
| (Date) |
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